Penske Automotive Group Inc (PAG)
Interest coverage
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 1,517,500 | 1,645,200 | 1,487,800 | 1,356,400 | 704,500 |
| Interest expense | US$ in thousands | 277,600 | 225,700 | 122,800 | 94,800 | 165,900 |
| Interest coverage | 5.47 | 7.29 | 12.12 | 14.31 | 4.25 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $1,517,500K ÷ $277,600K
= 5.47
The interest coverage ratio for Penske Automotive Group Inc has shown a fluctuating trend over the past five years. It stood at 4.25 on December 31, 2020, indicating that the company's operating income was able to cover its interest expenses 4.25 times.
Subsequently, the interest coverage ratio improved significantly to 14.31 by December 31, 2021, which suggests a strong ability to meet interest obligations. This was followed by another positive performance in 2022 with an interest coverage ratio of 12.12.
However, there was a decrease in the interest coverage ratio to 7.29 by December 31, 2023, indicating a potential decrease in the company's ability to cover interest expenses compared to previous years.
The trend continued downwards in 2024 with an interest coverage ratio of 5.47, suggesting that the company may be facing increasing challenges in meeting its interest payments compared to the previous year.
Overall, while the interest coverage ratio has shown some variability in recent years, Penske Automotive Group Inc generally demonstrated a strong ability to cover its interest expenses, with the ratios well above 1.0 in each year, indicating sufficient earnings to meet interest payments. However, the recent decline in the ratio raises a flag, and it would be important for stakeholders to monitor the company's financial performance closely to ensure continued ability to service its debt obligations.
Peer comparison
Dec 31, 2024