Patrick Industries Inc (PATK)

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	—	260,200	496,170	351,712	173,373
Interest expense	US$ in thousands	79,470	68,942	60,760	57,890	43,001
Interest coverage		0.00	3.77	8.17	6.08	4.03

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $—K ÷ $79,470K
= 0.00

Based on the provided interest coverage data for Patrick Industries Inc, we observe a fluctuation in the interest coverage ratio over the years. As of December 31, 2020, the interest coverage ratio stood at 4.03, indicating that the company generated operating income 4.03 times greater than its interest expense, suggesting a moderate ability to cover its interest obligations.

Subsequently, by December 31, 2021, the interest coverage ratio improved to 6.08, reflecting a stronger financial position with the company generating operating income 6.08 times its interest expense.

The following year, as of December 31, 2022, the interest coverage ratio further increased to 8.17, indicating a solid ability to cover interest costs with operating income 8.17 times the interest expenses.

However, in the subsequent year ending December 31, 2023, the interest coverage ratio decreased to 3.77, showing a slight weakening in the company's ability to cover its interest payments.

Notably, by December 31, 2024, the interest coverage ratio reported as 0.00, which suggests that the company's operating income was insufficient to cover its interest expenses, implying a substantial financial challenge in that specific period.

In conclusion, the trend in Patrick Industries Inc's interest coverage ratio shows fluctuations over the years, with periods of improvement and decline. It is essential for investors and stakeholders to monitor this ratio closely, as a lower interest coverage ratio indicates a higher financial risk and the possibility of potential liquidity issues.