Karooooo (Karooooo) Interest Coverage : 64.76 (As of Nov. 2023)

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What is Karooooo Interest Coverage?

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income by its Interest Expense. Karooooo's Operating Income for the three months ended in Nov. 2023 was $14.8 Mil. Karooooo's Interest Expense for the three months ended in Nov. 2023 was $-0.2 Mil. Karooooo's interest coverage for the quarter that ended in Nov. 2023 was 64.76. The higher the ratio, the stronger the company's financial strength is.

Good Sign:

Ben Graham prefers companies' interest coverage to be at least 5. Karooooo Ltd has enough cash to cover all of its debt. Its financial situation is stable.

The historical rank and industry rank for Karooooo's Interest Coverage or its related term are showing as below:

KARO' s Interest Coverage Range Over the Past 10 Years
Min: 15.9 Med: 61.5 Max: 94.9
Current: 86.51

KARO's Interest Coverage is ranked better than
64.75% of 1603 companies
in the Software industry
Industry Median: 28.92 vs KARO: 86.51

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

Karooooo Interest Coverage Historical Data

The historical data trend for Karooooo's Interest Coverage can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

Note: For Interest Coverage, "No debt" indicates no long-term debt. An indication of "No Debt" does not necessarily mean that the company has no long-term debt obligations; it could be due to missing data in the quarterly or annual report. Use caution when interpreting this information.

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Karooooo Interest Coverage Chart

Karooooo Annual Data

Trend

Feb19

Feb20

Feb21

Feb22

Feb23

Interest Coverage

15.90

37.49

79.29

61.50

94.90

Karooooo Quarterly Data
	Feb19	Nov19	Feb20	May20	Aug20	Nov20	Feb21	May21	Aug21	Nov21	Feb22	May22	Aug22	Nov22	Feb23	May23	Aug23	Nov23
Interest Coverage	Get a 7-Day Free Trial													427.29	119.32	103.41	82.81	64.76

Competitive Comparison of Karooooo's Interest Coverage

For the Software - Application subindustry, Karooooo's Interest Coverage, along with its competitors' market caps and Interest Coverage data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Karooooo's Interest Coverage Distribution in the Software Industry

For the Software industry and Technology sector, Karooooo's Interest Coverage distribution charts can be found below:

* The bar in red indicates where Karooooo's Interest Coverage falls into.

Karooooo Interest Coverage Calculation

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:

If Interest Expense is negative and Operating Income is positive, then

Interest Coverage

-1

Operating Income

Interest Expense

Else if Interest Expense is negative and Operating Income is negative, then

The company did not have earnings to cover the interest expense.

Else if Interest Expense is 0 and Long-Term Debt & Capital Lease Obligation is 0, then

The company had no debt ⁽¹⁾.

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

Karooooo's Interest Coverage for the fiscal year that ended in Feb. 2023 is calculated as

Here, for the fiscal year that ended in Feb. 2023, Karooooo's Interest Expense was $-0.5 Mil. Its Operating Income was $49.3 Mil. And its Long-Term Debt & Capital Lease Obligation was $5.9 Mil.

Interest Coverage	=	-1	*	Operating Income (A: Feb. 2023 )	/	Interest Expense (A: Feb. 2023 )
	=	-1	*	49.251	/	-0.519
	=	94.90

Karooooo's Interest Coverage for the quarter that ended in Nov. 2023 is calculated as

Here, for the three months ended in Nov. 2023, Karooooo's Interest Expense was $-0.2 Mil. Its Operating Income was $14.8 Mil. And its Long-Term Debt & Capital Lease Obligation was $9.3 Mil.

Interest Coverage	=	-1	*	Operating Income (Q: Nov. 2023 )	/	Interest Expense (Q: Nov. 2023 )
	=	-1	*	14.83	/	-0.229
	=	64.76

The higher the ratio, the stronger the company's Financial Strength is.

Karooooo (NAS:KARO) Interest Coverage Explanation

Ben Graham requires that a company has a minimum interest coverage of 5 with the companies he invested. If the interest coverage is less than 2, the company is burdened by debt. Any business slow or recession may drag the company into a situation where it cannot pay the interest on its debt.

Interest Coverage is an important factor when GuruFocus ranks a company's overage Financial Strength .

Karooooo Interest Coverage Related Terms

Thank you for viewing the detailed overview of Karooooo's Interest Coverage provided by GuruFocus.com. Please click on the following links to see related term pages.

Karooooo (Karooooo) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Software » Karooooo Ltd (NAS:KARO) » Definitions » Interest Coverage

Comparable Companies

Traded in Other Exchanges

KRO:South Africa

Address

1 Harbourfront Avenue, Keppel Bay Tower No. 14-07, Singapore, SGP, 098632

Website

https://www.karooooo.com

Karooooo Ltd is a global provider of real-time mobility data analytics solutions for smart transportation. It offers a comprehensive, cloud-based smart mobility platform for connected vehicles and other assets. The company's software-as-a-service platform provides customers with differentiated insights and analytics to optimize business and workforce, increase efficiency and decrease costs, improve safety, monitor environmental impact, assist with regularity compliance and manage risk. The segments of the group are Cartrack; Carzuka; and Karooooo Logistics, of which key revenue is derived from the Cartrack segment.