The Chefs Warehouse Inc (CHEF)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 100,943 | 85,738 | 10,811 | -102,660 | 50,667 |
| Interest expense | US$ in thousands | 45,474 | 43,849 | 17,587 | 20,946 | 18,264 |
| Interest coverage | 2.22 | 1.96 | 0.61 | -4.90 | 2.77 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $100,943K ÷ $45,474K
= 2.22
The interest coverage ratio for The Chefs Warehouse Inc has varied over the past five years. In 2023, the company's interest coverage ratio stood at 2.22, indicating that the company generated sufficient operating income to cover its interest expenses 2.22 times. This suggests an improvement compared to 2022 when the ratio was 1.96.
Looking back, in 2021, the interest coverage ratio was 0.61, which indicates that the company's operating income was just enough to cover its interest expenses. The significant decline in 2020, with a negative interest coverage ratio of -4.90, suggests that the company's operating income was insufficient to cover its interest expenses during that year.
However, the ratio rebounded in 2019 to 2.77, indicating a good ability to cover interest payments. It is worth noting that a consistent interest coverage ratio above 1.5 is generally considered adequate, as it implies that the company is comfortably meeting its interest obligations. The improving trend since 2020 is positive, suggesting better financial stability and ability to service its debt obligations.
Peer comparison
Dec 31, 2023