RB Global Inc. (RBA)

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 784,406 745,673 734,368 709,430 488,381 382,638 302,975 213,165 302,838 286,090 271,510 268,744 240,994 263,594 282,063 281,777 274,113 286,559 256,207 244,860
Interest expense (ttm) US$ in thousands 233,700 246,974 253,474 258,574 215,574 159,132 104,631 58,094 57,880 58,721 58,329 48,733 36,993 35,387 35,317 35,332 35,568 37,055 38,408 39,643
Interest coverage 3.36 3.02 2.90 2.74 2.27 2.40 2.90 3.67 5.23 4.87 4.65 5.51 6.51 7.45 7.99 7.98 7.71 7.73 6.67 6.18

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $784,406K ÷ $233,700K
= 3.36

RB Global Inc.'s interest coverage has shown fluctuations over the years. The interest coverage ratio measures the company's ability to meet its interest payments on outstanding debt. A higher ratio indicates a better ability to cover interest expenses.

From March 31, 2020, to June 30, 2021, RB Global Inc.'s interest coverage ratio consistently increased from 6.18 to 7.99, indicating an improvement in the company's ability to cover interest expenses. However, from September 30, 2021, to December 31, 2024, the interest coverage ratio saw a declining trend, dropping to 3.36 by the end of December 2024.

The declining trend in the interest coverage ratio from September 2021 to December 2024 could be concerning as it may suggest that RB Global Inc. is having difficulty meeting its interest obligations with its earnings. Management should closely monitor this ratio to ensure the company's financial health and sustainability. A low interest coverage ratio may indicate financial distress and an increased risk of default on debt obligations.