Ali Alghanim Sons Automotive Co KSC (KUW:ALG) Interest Coverage : 12.07 (As of Mar. 2024)

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What is Ali Alghanim Sons Automotive Co KSC 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. Ali Alghanim Sons Automotive Co KSC's Operating Income for the three months ended in Mar. 2024 was KWD8.1 Mil. Ali Alghanim Sons Automotive Co KSC's Interest Expense for the three months ended in Mar. 2024 was KWD-0.7 Mil. Ali Alghanim Sons Automotive Co KSC's interest coverage for the quarter that ended in Mar. 2024 was 12.07. The higher the ratio, the stronger the company's financial strength is.

The historical rank and industry rank for Ali Alghanim Sons Automotive Co KSC's Interest Coverage or its related term are showing as below:

KUW:ALG' s Interest Coverage Range Over the Past 10 Years
Min: 11.99 Med: 15.61 Max: 18.13
Current: 13.74

KUW:ALG's Interest Coverage is ranked better than
62.98% of 1040 companies
in the Vehicles & Parts industry
Industry Median: 7.815 vs KUW:ALG: 13.74

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

Ali Alghanim Sons Automotive Co KSC Interest Coverage Historical Data

The historical data trend for Ali Alghanim Sons Automotive Co KSC'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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Ali Alghanim Sons Automotive Co KSC Interest Coverage Chart

Ali Alghanim Sons Automotive Co KSC Annual Data

Trend

Dec21

Dec22

Dec23

Interest Coverage

11.99

18.13

15.61

Ali Alghanim Sons Automotive Co KSC Quarterly Data
	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24
Interest Coverage	Get a 7-Day Free Trial							23.16	15.30	14.40	13.68	12.07

Competitive Comparison of Ali Alghanim Sons Automotive Co KSC's Interest Coverage

For the Auto & Truck Dealerships subindustry, Ali Alghanim Sons Automotive Co KSC'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.

Ali Alghanim Sons Automotive Co KSC's Interest Coverage Distribution in the Vehicles & Parts Industry

For the Vehicles & Parts industry and Consumer Cyclical sector, Ali Alghanim Sons Automotive Co KSC's Interest Coverage distribution charts can be found below:

* The bar in red indicates where Ali Alghanim Sons Automotive Co KSC's Interest Coverage falls into.

Ali Alghanim Sons Automotive Co KSC 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.

Ali Alghanim Sons Automotive Co KSC's Interest Coverage for the fiscal year that ended in Dec. 2023 is calculated as

Here, for the fiscal year that ended in Dec. 2023, Ali Alghanim Sons Automotive Co KSC's Interest Expense was KWD-2.0 Mil. Its Operating Income was KWD31.5 Mil. And its Long-Term Debt & Capital Lease Obligation was KWD34.1 Mil.

Interest Coverage	=	-1	*	Operating Income (A: Dec. 2023 )	/	Interest Expense (A: Dec. 2023 )
	=	-1	*	31.451	/	-2.015
	=	15.61

Ali Alghanim Sons Automotive Co KSC's Interest Coverage for the quarter that ended in Mar. 2024 is calculated as

Here, for the three months ended in Mar. 2024, Ali Alghanim Sons Automotive Co KSC's Interest Expense was KWD-0.7 Mil. Its Operating Income was KWD8.1 Mil. And its Long-Term Debt & Capital Lease Obligation was KWD33.3 Mil.

Interest Coverage	=	-1	*	Operating Income (Q: Mar. 2024 )	/	Interest Expense (Q: Mar. 2024 )
	=	-1	*	8.053	/	-0.667
	=	12.07

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

Ali Alghanim Sons Automotive Co KSC (KUW:ALG) 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 .

Ali Alghanim Sons Automotive Co KSC Interest Coverage Related Terms

Thank you for viewing the detailed overview of Ali Alghanim Sons Automotive Co KSC's Interest Coverage provided by GuruFocus.com. Please click on the following links to see related term pages.

Ali Alghanim Sons Automotive Co KSC (KUW:ALG) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Vehicles & Parts » Ali Alghanim Sons Automotive Co KSC (KUW:ALG) » Definitions » Interest Coverage

Comparable Companies

Traded in Other Exchanges

N/A

Address

Airport Road 55, P.O. Box 21540, Safat, Opposite Kaifan Telecommunication, Shuwaikh, KWT, 13076

Website

https://alg.com.kw

Ali Alghanim Sons Automotive Co KSC is engaged in the automotive business. The Primary Activities of the Company are selling and purchasing cars and spare parts, importing and exporting light and heavy vehicles and cars, renting cars, maintaining light & heavy vehicles and cars, trading auto spare parts, and renting equipment and their maintenance. The Group is divided into four main geographical segments which are the State of Kuwait, Iraq, Egypt and the United Arab Emirates. The majority is derived from Kuwait.