Mister Car Wash, Inc. Common Stock (MCW)
Interest coverage
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 182,155 | 178,145 | 85,040 | -43,719 | 141,180 |
| Interest expense | US$ in thousands | 79,488 | 75,104 | 41,895 | 39,424 | 64,009 |
| Interest coverage | 2.29 | 2.37 | 2.03 | -1.11 | 2.21 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $182,155K ÷ $79,488K
= 2.29
The interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt. A ratio below 1 indicates that the company is not generating enough operating income to cover its interest expenses.
Analysis of Mister Car Wash, Inc. Common Stock's interest coverage reveals the following trends:
- As of December 31, 2020, the interest coverage ratio stood at 2.21, indicating that the company was able to cover its interest payments comfortably.
- However, by December 31, 2021, the interest coverage ratio declined significantly to -1.11, suggesting that the company's operating income was insufficient to cover its interest expenses. This negative ratio raises concerns about the company's financial health and its ability to meet its debt obligations.
- In the subsequent years, there was an improvement in the interest coverage ratio, with ratios of 2.03, 2.37, and 2.29 for December 31, 2022, 2023, and 2024, respectively. While these ratios indicate some recovery in the company's ability to cover its interest payments, it is essential to monitor future performance to ensure sustained improvement.
Overall, the fluctuations in Mister Car Wash, Inc. Common Stock's interest coverage ratio highlight the importance of closely monitoring the company's profitability and debt management practices to mitigate financial risks.
Peer comparison
Dec 31, 2024