Penske Automotive Group Inc (PAG)

Interest coverage

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020
Earnings before interest and tax (EBIT) (ttm) US$ in thousands 1,385,400 1,305,300 1,258,700 1,301,500 1,474,300 1,503,400 1,534,600 1,541,400 1,487,800 1,508,600 1,523,700 1,538,800 1,356,400 1,242,600 1,149,000 817,700 704,500 614,800 500,000 600,400
Interest expense (ttm) US$ in thousands 277,600 229,400 215,700 204,200 186,800 204,800 176,500 147,500 122,800 99,300 89,800 91,400 94,800 114,800 131,400 143,900 165,900 179,600 195,100 206,400
Interest coverage 4.99 5.69 5.84 6.37 7.89 7.34 8.69 10.45 12.12 15.19 16.97 16.84 14.31 10.82 8.74 5.68 4.25 3.42 2.56 2.91

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,385,400K ÷ $277,600K
= 4.99

The interest coverage ratio of Penske Automotive Group Inc has shown a generally positive trend over the examined period. It increased from 2.91 as of March 31, 2020, to 4.99 as of December 31, 2024, indicating the company's improving ability to cover its interest expenses with its operating income.

The ratio demonstrates that the company generated more than enough earnings to cover its interest payments throughout the period, with the coverage ratio peaking at 16.97 on June 30, 2022. This indicates a healthy financial position and lower risk of default due to an inability to meet interest obligations.

From March 31, 2020, to December 31, 2024, Penske Automotive Group Inc's interest coverage ratio generally trended upward with some fluctuations, suggesting successful financial management and operational performance. However, the ratio experienced a slight decline towards the end of the period, indicating a potential need for monitoring interest obligations in relation to earnings in upcoming periods.