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CarMax Interest Coverage

: 1.69 (As of Aug. 2021)
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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. CarMax's Operating Income for the three months ended in Aug. 2021 was $140 Mil. CarMax's Interest Expense for the three months ended in Aug. 2021 was $-83 Mil. CarMax's interest coverage for the quarter that ended in Aug. 2021 was 1.69. The higher the ratio, the stronger the company's financial strength is.

Warning Sign:

Ben Graham prefers companies interest coverage is at least 5. CarMax Inc interest coverage is 1.08, which is low.

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

NYSE:KMX' s Interest Coverage Range Over the Past 10 Years
Min: 0.68   Med: 12.86   Max: 40.87
Current: 1.08

0.68
40.87

NYSE:KMX's Interest Coverage is ranked higher than
76% of the 79 Companies
in the Vehicles & Parts industry.

( Industry Median: 6.03 vs. NYSE:KMX: 1.08 )

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


CarMax Interest Coverage Historical Data

The historical data trend for CarMax'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.

* Premium members only.

CarMax Annual Data
Trend Feb12 Feb13 Feb14 Feb15 Feb16 Feb17 Feb18 Feb19 Feb20 Feb21
Interest Coverage
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 12.32 10.06 1.53 1.26 0.68

CarMax Quarterly Data
Nov16 Feb17 May17 Aug17 Nov17 Feb18 May18 Aug18 Nov18 Feb19 May19 Aug19 Nov19 Feb20 May20 Aug20 Nov20 Feb21 May21 Aug21
Interest Coverage Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 2.16 7.84 - 15.61 1.69

Competitive Comparison

For the Auto & Truck Dealerships subindustry, CarMax'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.

   

CarMax Interest Coverage Distribution

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

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



CarMax 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.


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

CarMax's Interest Coverage for the fiscal year that ended in Feb. 2021 is calculated as

Here, for the fiscal year that ended in Feb. 2021, CarMax's Interest Expense was $-400 Mil. Its Operating Income was $274 Mil. And its Long-Term Debt & Capital Lease Obligation was $15,044 Mil.

Interest Coverage=-1* Operating Income (A: Feb. 2021 )/Interest Expense (A: Feb. 2021 )
=-1*273.625/-400.278
=0.68

CarMax's Interest Coverage for the quarter that ended in Aug. 2021 is calculated as

Here, for the three months ended in Aug. 2021, CarMax's Interest Expense was $-83 Mil. Its Operating Income was $140 Mil. And its Long-Term Debt & Capital Lease Obligation was $17,168 Mil.

Interest Coverage=-1* Operating Income (Q: Aug. 2021 )/Interest Expense (Q: Aug. 2021 )
=-1*140.309/-83.01
=1.69

* 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.

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


CarMax  (NYSE:KMX) 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 .


CarMax Interest Coverage Related Terms

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


CarMax Business Description

CarMax logo
Industry
Consumer Cyclical » Vehicles & Parts NAICS : 423110 SIC : 5521
Traded in Other Exchanges
Address
12800 Tuckahoe Creek Parkway, Richmond, VA, USA, 23238
CarMax sells, finances, and services used and new cars through a chain of 220 used retail stores at the end of fiscal 2021 plus one new vehicle store. It was formed in 1993 as a unit of Circuit City and spun off into an independent company in late 2002. Used-vehicle sales account for about 83% of revenue, wholesale about 14%, and the remaining portion is composed of extended service plans and repair. In fiscal 2021, the company retailed and wholesaled 751,862 and 426,268 used vehicles, respectively. CarMax is the largest used vehicle retailer in the U.S., but still estimates that it has only about 3.5% U.S. market share of vehicles 0 to 10 years old but seeks over 5% by the end of calendar 2025. CarMax is based in Richmond, Virginia.
Executives
Oneil Mark F director C/O CARMAX, INC. 12800 TUCKAHOE CREEK PARKWAY RICHMOND VA 23238
Reedy Thomas W Jr officer: EVP of Finance 12800 TUCKHOE CREEK PARKWAY RICHMOND VA 23238
Margolin Eric M officer: EVP, Gen. Counsel & Secretary C/O ADVANCE AUTO PARTS 5673 AIRPORT RD ROANOKE VA 24012
Lyski James officer: EVP & Chief Marketing Officer ONE NATIONWIDE PLAZA 1-38-06 COLUMBUS OH 43215
Nash William D officer: President & CEO 12800 TUCKAHOE CREEK PARKWAY RICHMOND VA 23238
Daniels Jon G officer: SVP, CAF 12800 TUCKAHOE CREEK PARKWAY RICHMOND VA 23238
Folliard Thomas J director 4900 COX RD GELN ALLEN VA 23060
Livesay Jill A officer: VP, Controller & PAO CARMAX, INC. 12800 TUCKAHOE CREEK PARKWAY RICHMOND VA 23238
Cafritz Diane L officer: SVP & CHRO 12800 TUCKAHOE CREEK PARKWAY RICHMOND VA 23238
Hill Edwin J officer: EVP & COO 12800 TUCKAHOE CREEK PARKWAY RICHMOND VA 23238
Blaylock Ronald E director PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"> Ownership Information: BLAYLOCK RONALD E a.header:link {color: #3b4fae; font-weight: bold; text-decoration: underline;} a.header:visited {color: #3b4fae; font-weight: bold; text-decoration: underline;} a.header:hover {color: #191970;}
Satriano Pietro director C/O US FOODS HOLDING CORP. 9399 W. HIGGINS RD., STE 100 ROSEMONT IL 60018
Shinder Marcella director 12800 TUCKAHOE CREEK PARKWAY RICHMOND VA 23238
Steenrod Mitchell D director 12800 TUCKAHOE CREEK PKWY RICHMOND VA 23238
Mccreight David W. director C/O URBAN OUTFITTERS, INC. 5000 SOUTH BROAD STREET PHILADELPHIA PA 19112

CarMax Headlines

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