Texas Roadhouse Inc (TXRH)
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 | 353,989 | 320,197 | 297,192 | 23,844 | 212,023 |
| Interest expense | US$ in thousands | 500 | 1,300 | 200 | 300 | 1,514 |
| Interest coverage | 707.98 | 246.31 | 1,485.96 | 79.48 | 140.04 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $353,989K ÷ $500K
= 707.98
The interest coverage ratio for Texas Roadhouse Inc has shown significant fluctuations over the past five years. In particular, the interest coverage ratio was notably high in 2021 at 1,485.96, indicating the company's strong ability to cover its interest expenses with its earnings. However, this ratio dropped substantially in 2022 to 246.31 before skyrocketing to 707.98 in 2023.
Such fluctuations suggest varying levels of profitability and financial stability within the company over the years. A high interest coverage ratio indicates that Texas Roadhouse Inc has ample earnings to cover its interest payments, which is generally considered a positive indicator of financial health. However, investors and analysts should monitor the trend in the interest coverage ratio over time to assess the company's ability to sustain its debt obligations.
Peer comparison
Dec 31, 2023