Mister Car Wash Inc (MCW)
Interest coverage
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 178,145 | 187,719 | -7,714 |
| Interest expense | US$ in thousands | 75,104 | 41,895 | 39,424 |
| Interest coverage | 2.37 | 4.48 | -0.20 |
December 31, 2023 calculation
Interest coverage = EBIT ÷ Interest expense
= $178,145K ÷ $75,104K
= 2.37
The interest coverage ratio measures a company's ability to meet interest obligations on its debt. A higher value indicates stronger ability to cover interest expenses using its earnings.
For Mister Car Wash Inc, the interest coverage ratio has fluctuated over the past three years. In 2023, the interest coverage ratio was 2.37, down from 4.46 in 2022 but improved significantly from a negative value of -0.70 in 2021.
The decline in the interest coverage ratio from 2022 to 2023 may suggest that the company's earnings are less able to cover its interest expenses. However, the positive improvement from a negative ratio in 2021 indicates a stronger financial position. It is important for investors and creditors to monitor this ratio to ensure the company can manage its debt obligations effectively.
Peer comparison
Dec 31, 2023