Name: Interest Coverage

Definition: Interest coverage tells you how easily the company can pay interest on its debt using operating profits. It’s like asking: “Can the company comfortably make its loan payments, or is it barely scraping by?” The higher the ratio, the safer. A very low ratio means debt payments may strain the business, especially if profits drop.

Interpretation:
• In '2021', RUSHA's interest coverage was 130.25, indicating the firm's ability to meet its interest obligations. Industry average for Retail-Auto Dealers and Gas Stations in '2021' stood at 4.49.
• In '2022', RUSHA's interest coverage was 26.77, indicating the firm's ability to meet its interest obligations. The decline from '2021' may indicate some operational or financial challenges. Industry average for Retail-Auto Dealers and Gas Stations in '2022' stood at 2.73. Industry average declined by 1.76 from previous year.
• In '2023', RUSHA's interest coverage was 9.61, indicating the firm's ability to meet its interest obligations. The decline from '2022' may indicate some operational or financial challenges. Industry average for Retail-Auto Dealers and Gas Stations in '2023' stood at 2.91. Industry average increased by 0.18 compared to previous year.
• In '2024', RUSHA's interest coverage was 6.52, indicating the firm's ability to meet its interest obligations. The decline from '2023' may indicate some operational or financial challenges. Industry average for Retail-Auto Dealers and Gas Stations in '2024' stood at 2.75. Industry average declined by 0.16 from previous year.
Overall, RUSHA's interest coverage has been volatile but showed a downward trend over the past 4 years.

Formula: Interest Coverage = EBIT / Interest Expense

Good Range: Minimum 3-5 desirable; below 1 is risky.