PACCAR Inc (PCAR)

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	33,198,700	3,848,700	2,396,300	1,661,700	3,099,300
Interest expense	US$ in thousands	520,400	0	0	100	100
Interest coverage		63.79	—	—	16,617.00	30,993.00

December 31, 2023 calculation

Interest coverage = EBIT ÷ Interest expense
= $33,198,700K ÷ $520,400K
= 63.79

As the interest coverage ratio data for Paccar Inc. is not provided in the table, it is not possible to conduct a direct analysis of the company's ability to cover its interest expenses with its operating income for the years 2019 to 2023.

Interest coverage ratio is a key financial metric that indicates a company's ability to meet its interest obligations from its earnings. A higher interest coverage ratio is generally favorable as it suggests that the company is generating sufficient operating income to cover its interest expenses comfortably.

To assess Paccar Inc.'s financial health regarding interest coverage, it is essential to calculate this ratio using the formula: Interest Coverage Ratio = EBIT / Interest Expense. EBIT (Earnings Before Interest and Taxes) can be calculated from the company's income statement.

Without specific data on the interest coverage ratio for Paccar Inc., further analysis or comparison with industry benchmarks is not possible. It is recommended to calculate this ratio to gain insights into the company's ability to meet its interest payments and assess its financial leverage over the specified period.