Penske Automotive Group Inc (PAG)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 1,351,500 | 1,487,800 | 1,356,400 | 704,500 | 652,700 |
| Interest expense | US$ in thousands | 92,600 | 70,400 | 68,600 | 111,000 | 208,700 |
| Interest coverage | 14.60 | 21.13 | 19.77 | 6.35 | 3.13 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $1,351,500K ÷ $92,600K
= 14.60
Interest coverage ratio is a measure of a company's ability to meet its interest payments on outstanding debt. It is calculated by dividing the earnings before interest and taxes (EBIT) by the interest expense. A higher interest coverage ratio indicates a better ability to cover interest payments.
For Penske Automotive Group Inc, the interest coverage ratio has fluctuated over the past five years, as follows:
- Dec 31, 2019: 3.83
- Dec 31, 2020: 5.27
- Dec 31, 2021: 18.26
- Dec 31, 2022: 16.14
- Dec 31, 2023: 7.47
The trend shows an improvement in the interest coverage ratio from 2019 to 2022, indicating a strengthening ability to cover interest obligations. However, there was a slight decrease in 2023 compared to 2022, which may warrant further analysis to understand the reasons behind this change.
Overall, Penske Automotive Group Inc has demonstrated a relatively healthy interest coverage ratio over the past five years, with the company being able to comfortably cover its interest payments.
Peer comparison
Dec 31, 2023