Li Auto (Li Auto) Interest Coverage : 222.07 (As of Dec. 2023)

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What is Li Auto 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. Li Auto's Operating Income for the three months ended in Dec. 2023 was $425 Mil. Li Auto's Interest Expense for the three months ended in Dec. 2023 was $-2 Mil. Li Auto's interest coverage for the quarter that ended in Dec. 2023 was 222.07. 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. Li Auto Inc has enough cash to cover all of its debt. Its financial situation is stable.

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

LI' s Interest Coverage Range Over the Past 10 Years
Min: 84.59 Med: 85.87 Max: 85.87
Current: 84.59

LI's Interest Coverage is ranked better than
88.06% of 1030 companies
in the Vehicles & Parts industry
Industry Median: 7.87 vs LI: 84.59

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

Li Auto Interest Coverage Historical Data

The historical data trend for Li Auto'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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Li Auto Interest Coverage Chart

Li Auto Annual Data

Trend

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Interest Coverage

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85.87

Li Auto Quarterly Data
	Dec18	Mar19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
Interest Coverage	Get a 7-Day Free Trial														-	12.49	57.17	199.97	222.07

Competitive Comparison of Li Auto's Interest Coverage

For the Auto Manufacturers subindustry, Li Auto'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.

Li Auto's Interest Coverage Distribution in the Vehicles & Parts Industry

For the Vehicles & Parts industry and Consumer Cyclical sector, Li Auto's Interest Coverage distribution charts can be found below:

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

Li Auto 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.

Li Auto'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, Li Auto's Interest Expense was $-12 Mil. Its Operating Income was $1,037 Mil. And its Long-Term Debt & Capital Lease Obligation was $760 Mil.

Interest Coverage	=	-1	*	Operating Income (A: Dec. 2023 )	/	Interest Expense (A: Dec. 2023 )
	=	-1	*	1037.349	/	-12.08
	=	85.87

Li Auto's Interest Coverage for the quarter that ended in Dec. 2023 is calculated as

Here, for the three months ended in Dec. 2023, Li Auto's Interest Expense was $-2 Mil. Its Operating Income was $425 Mil. And its Long-Term Debt & Capital Lease Obligation was $760 Mil.

Interest Coverage	=	-1	*	Operating Income (Q: Dec. 2023 )	/	Interest Expense (Q: Dec. 2023 )
	=	-1	*	425.258	/	-1.915
	=	222.07

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

Li Auto (NAS:LI) 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 .

Li Auto Interest Coverage Related Terms

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

Li Auto (Li Auto) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Vehicles & Parts » Li Auto Inc (NAS:LI) » Definitions » Interest Coverage

Comparable Companies

Traded in Other Exchanges

LIA:Mexico 02015:Hong Kong L87:Germany L87A:Germany L87A:Germany

Address

11 Wenliang Street, Shunyi District, Beijing, CHN, 101399

Website

https://www.lixiang.com

Li Auto is a leading Chinese NEV manufacturer that designs, develops, manufactures, and sells premium smart NEVs. The company started volume production of its first model Li One in November 2019. The model is a six-seater, large, premium plug-in electric SUV equipped with a range extension system and advanced smart vehicle solutions. It sold over 133,000 NEVs in 2022, accounting for about 2% of China's passenger new energy vehicle market. Beyond Li One, the company will expand its product line, including both BEVs and PHEVs, to target a broader consumer base.