The Chefs Warehouse Inc (CHEF)
Solvency ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 23, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.39 | 0.42 | 0.43 | 0.42 | 0.43 | 0.39 | 0.35 | 0.36 | 0.37 | 0.38 | 0.39 | 0.41 | 0.41 | 0.38 | 0.38 | 0.45 | 0.38 | 0.32 | 0.32 | 0.33 |
| Debt-to-capital ratio | 0.59 | 0.61 | 0.63 | 0.62 | 0.62 | 0.56 | 0.51 | 0.53 | 0.53 | 0.54 | 0.54 | 0.55 | 0.54 | 0.51 | 0.51 | 0.61 | 0.53 | 0.47 | 0.47 | 0.48 |
| Debt-to-equity ratio | 1.46 | 1.59 | 1.68 | 1.61 | 1.63 | 1.28 | 1.05 | 1.11 | 1.13 | 1.16 | 1.19 | 1.21 | 1.16 | 1.05 | 1.03 | 1.55 | 1.15 | 0.87 | 0.89 | 0.91 |
| Financial leverage ratio | 3.75 | 3.81 | 3.90 | 3.82 | 3.76 | 3.25 | 3.04 | 3.08 | 3.07 | 3.04 | 3.03 | 2.93 | 2.83 | 2.73 | 2.67 | 3.46 | 3.02 | 2.76 | 2.77 | 2.75 |
The solvency ratios of The Chefs Warehouse Inc show the company's ability to meet its long-term debt obligations. The trends in the ratios indicate the company's financial health over time.
1. Debt-to-assets ratio: This ratio measures the proportion of a company's assets financed by debt. The decreasing trend from 0.45 in March 2020 to 0.39 in December 2023 suggests a more conservative approach to debt financing, with a decreasing reliance on debt to fund assets.
2. Debt-to-capital ratio: This ratio indicates the proportion of a company's capital structure that is funded by debt. The increasing trend from 0.47 in March 2019 to 0.62 in December 2023 indicates a higher reliance on debt financing relative to equity. This trend suggests a potential increase in financial risk for the company.
3. Debt-to-equity ratio: This ratio shows the relationship between a company's total debt and total equity. The increasing trend from 0.87 in March 2019 to 1.68 in June 2023 indicates a growing proportion of debt in the capital structure relative to equity. This trend suggests higher financial leverage and potential risk for the company.
4. Financial leverage ratio: This ratio measures the extent to which a company has used debt to finance its assets. The increasing trend from 2.67 in June 2020 to 3.90 in June 2023 indicates a higher level of financial leverage over time. A higher financial leverage ratio may indicate increased financial risk for the company as it becomes more leveraged.
In summary, The Chefs Warehouse Inc's solvency ratios show a mixed picture with decreasing debt-to-assets ratio but increasing debt-to-capital, debt-to-equity, and financial leverage ratios over the analyzed period. This suggests the company may be taking on more debt relative to its assets and equity, which can pose increased financial risk and may warrant closer monitoring of its solvency position.
Coverage ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 23, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 2.22 | 1.60 | 1.56 | 1.85 | 1.96 | 3.02 | 3.49 | 2.16 | 0.61 | -2.85 | -3.94 | -5.14 | -4.90 | -1.80 | -0.68 | 1.46 | 2.77 | 2.54 | 2.51 | 2.41 |
The interest coverage ratio of The Chefs Warehouse Inc has fluctuated over the past five years. From December 2019 to December 2020, the ratio stayed relatively stable around 2.50, indicating the company's ability to cover its interest expenses was consistent.
However, from March 2021 to December 2021, the interest coverage ratio dropped significantly into negative territory, reaching its lowest point in December 2021 at -5.14. This suggests that the company's operating income was not sufficient to cover its interest expenses during this period.
Subsequently, there was a notable improvement in the interest coverage ratio through March 2023, with the ratio consistently increasing. By December 2023, the interest coverage ratio reached 2.22, indicating that the company's ability to cover its interest expenses had improved.
Overall, the trend in The Chefs Warehouse Inc's interest coverage suggests fluctuations in the company's ability to generate enough operating income to cover its interest obligations, with a period of distress followed by a recovery in recent quarters. Continued monitoring of this ratio will be important to assess the company's financial health and ability to meet its debt obligations.