BJs Restaurants Inc (BJRI)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 2.81 | 2.89 | 3.03 | 3.10 | 3.61 |
Based on the provided data for BJs Restaurants Inc, the solvency ratios indicate a strong financial position in terms of debt management:
1. Debt-to-assets ratio: This ratio measures the proportion of a company's assets financed by debt. BJs Restaurants Inc consistently shows a debt-to-assets ratio of 0.00 across the five years, indicating that the company relies very little on debt to finance its assets, which is favorable for long-term solvency.
2. Debt-to-capital ratio: This ratio assesses the extent to which a company's operations are funded by debt compared to equity and other capital sources. Similar to the debt-to-assets ratio, BJs Restaurants Inc maintains a debt-to-capital ratio of 0.00 throughout the period, suggesting minimal reliance on debt capital in its capital structure.
3. Debt-to-equity ratio: The debt-to-equity ratio evaluates the balance between a company's debt and equity financing. BJs Restaurants Inc consistently reports a debt-to-equity ratio of 0.00, indicating a conservative financial structure with no significant debt obligations relative to its equity.
4. Financial leverage ratio: This ratio measures the extent to which a company employs debt in its capital structure. BJs Restaurants Inc shows a declining trend in the financial leverage ratio over the five years, from 3.61 to 2.81. This indicates a decreasing reliance on debt financing, leading to improved financial stability and lower risk.
Overall, the solvency ratios suggest that BJs Restaurants Inc is effectively managing its debt levels, maintaining a strong solvency position, and reducing financial risk over time.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 2.51 | 3.05 | -12.51 | -8.81 | -13.71 |
Based on the provided data, the interest coverage ratio for BJs Restaurants Inc has been inconsistent over the last five years. The interest coverage ratio is a measure of a company's ability to meet its interest obligations from its operating income. A higher ratio indicates a stronger ability to cover interest expenses.
It is concerning to note that in the initial years (December 31, 2020, December 31, 2021, and December 31, 2022), the interest coverage ratios were negative, indicating that the company was not generating enough operating income to cover its interest expenses. This suggests a potential financial risk as the company may struggle to meet its interest obligations during these periods.
However, there has been a significant improvement in the interest coverage ratio in the most recent years (December 31, 2023 and December 31, 2024), where the ratio turned positive. This improvement indicates that BJs Restaurants Inc's earnings are now sufficient to cover its interest payments, which is a positive sign for the company's financial health.
Overall, the inconsistent trend in the interest coverage ratio for BJs Restaurants Inc raises concerns about the company's financial stability and its ability to manage its debt obligations. Continued monitoring of this ratio will be essential to gauge the company's financial performance and risk profile.