Texas Roadhouse Inc (TXRH)

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	517,745	354,264	321,797	297,926	26,107
Interest expense	US$ in thousands	6,774	500	124	3,663	4,091
Interest coverage		76.43	708.53	2,595.14	81.33	6.38

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $517,745K ÷ $6,774K
= 76.43

The interest coverage ratio for Texas Roadhouse Inc has displayed significant fluctuations over the years, indicating variations in the company's ability to cover its interest expenses. In December 2020, the interest coverage ratio was 6.38, reflecting that the company generated sufficient earnings before interest and taxes to cover its interest payments comfortably.

By the end of 2021, the interest coverage ratio surged to 81.33, indicating a substantial improvement in the company's financial health and ability to meet interest obligations effortlessly. This significant increase suggests that Texas Roadhouse Inc experienced a notable increase in profitability relative to its interest expenses during the year.

In December 2022, the interest coverage ratio skyrocketed to 2,595.14, showcasing an exceptionally strong position where the company's earnings were substantially higher than its interest expenses, signaling robust financial performance and sound management of debt obligations.

However, by the end of 2023, the interest coverage ratio decreased to 708.53, although it still remained at a relatively high level, signifying that the company continued to generate ample profits to cover its interest burdens efficiently.

In December 2024, the interest coverage ratio decreased further to 76.43, indicating a slight decline from the previous year but still demonstrating that Texas Roadhouse Inc remained financially healthy and capable of meeting its interest payments comfortably.

Overall, the fluctuations in the interest coverage ratio over the years for Texas Roadhouse Inc reflect varying levels of profitability and ability to service interest expenses, with the company generally maintaining a strong financial position and demonstrating effective management of its debt obligations.