The Chefs Warehouse Inc (CHEF)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.37 | 0.39 | 0.43 | 0.37 | 0.41 |
| Debt-to-capital ratio | 0.56 | 0.59 | 0.62 | 0.53 | 0.54 |
| Debt-to-equity ratio | 1.28 | 1.46 | 1.63 | 1.13 | 1.16 |
| Financial leverage ratio | 3.46 | 3.75 | 3.76 | 3.07 | 2.83 |
The solvency ratios of The Chefs Warehouse Inc indicate its ability to meet its long-term financial obligations.
1. Debt-to-assets ratio: This ratio decreased from 0.41 in 2020 to 0.37 in 2021, suggesting a lower reliance on debt to finance assets. However, it increased to 0.43 in 2022, before declining to 0.39 in 2023 and 0.37 in 2024. Overall, the trend shows fluctuation in the proportion of assets financed by debt over the years.
2. Debt-to-capital ratio: The company's debt-to-capital ratio ranged from 0.53 to 0.62 during the period. This ratio decreased slightly in 2024 compared to 2022, indicating a somewhat improved capital structure in that year.
3. Debt-to-equity ratio: The debt-to-equity ratio ranged from 1.13 to 1.63 over the years. The increase in 2022 suggests higher financial risk due to more debt relative to equity, but it then decreased in subsequent years. The ratio of 1.28 in 2024 indicates a moderate level of leverage compared to equity.
4. Financial leverage ratio: The financial leverage ratio increased from 2.83 in 2020 to 3.76 in 2022, before slightly declining to 3.46 in 2024. This indicates that the company's use of debt to finance assets increased significantly in 2022 but moderated in the following years.
Overall, the company's solvency ratios show fluctuations but generally suggest a moderate level of debt usage to finance its operations and assets. The trends in these ratios can provide insights into the company's financial health and risk management strategies.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 2.63 | 2.22 | 1.96 | 0.61 | -4.90 |
The interest coverage ratio of The Chefs Warehouse Inc has shown a significant improvement over the past few years. In December 2020, the ratio stood at -4.90, indicating the company's inability to cover its interest expenses with its operating income. However, there has been a notable recovery since then.
By December 2021, the interest coverage ratio improved to 0.61, still below 1 which suggests the company was barely able to cover its interest payments. Subsequently, the ratio continued to increase to 1.96 by December 2022, and further to 2.22 by December 2023. These values indicate that the company's operating income became more sufficient to cover its interest obligations.
As of December 31, 2024, The Chefs Warehouse Inc achieved an interest coverage ratio of 2.63, indicating a stronger ability to meet its interest expenses. This positive trend in the interest coverage ratio reflects the company's improved financial health and reduced risk of defaulting on its debt payments.