Rush Enterprises A Inc (RUSHA)

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	514,749	528,387	316,110	161,450	220,010
Interest expense	US$ in thousands	53,694	19,763	2,427	9,727	30,487
Interest coverage		9.59	26.74	130.25	16.60	7.22

December 31, 2023 calculation

Interest coverage = EBIT ÷ Interest expense
= $514,749K ÷ $53,694K
= 9.59

The interest coverage ratio measures the company's ability to pay its interest expenses on outstanding debt. It is calculated by dividing earnings before interest and taxes (EBIT) by the interest expense.

Based on the data provided:
- In Dec 31, 2023, the interest coverage ratio was 9.59, indicating that the company generated 9.59 times the earnings needed to cover its interest expense.
- In Dec 31, 2022, the interest coverage ratio significantly improved to 26.74, suggesting a stronger ability to cover interest payments compared to the previous year.
- In Dec 31, 2021, the interest coverage ratio was notably high at 130.25, reflecting a robust capacity to meet interest obligations.
- In Dec 31, 2020, the interest coverage ratio decreased to 16.60, but still remained at a healthy level.
- In Dec 31, 2019, the interest coverage ratio was 7.22, indicating a lower ability to cover interest expenses compared to the subsequent years.

Overall, Rush Enterprises A Inc has generally exhibited strong interest coverage ratios in recent years, with the exception of a slight dip in 2020. This indicates the company's ability to comfortably meet its interest obligations and suggests a lower risk of defaulting on its debt payments.