Monster Beverage Corp (MNST)

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	1,930,290	1,884,460	1,584,720	1,797,470	1,633,150
Interest expense	US$ in thousands	59,165	115,127	12,757	54,107	53,977
Interest coverage		32.63	16.37	124.22	33.22	30.26

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $1,930,290K ÷ $59,165K
= 32.63

The interest coverage ratio measures a company's ability to meet its interest obligations on outstanding debt. Looking at the data provided for Monster Beverage Corp, we see a consistent pattern over the past five years.

As of December 31, 2020, the interest coverage ratio stood at 30.26, indicating that the company generated 30.26 times the earnings necessary to cover its interest expenses. This suggests a strong ability to fulfill its interest payments without difficulty.

By December 31, 2021, the interest coverage ratio improved further to 33.22, signaling a continued robust financial position with ample earnings relative to interest obligations.

The financial health of Monster Beverage Corp improved significantly by December 31, 2022, as the interest coverage ratio surged to 124.22. This exceptional ratio reflects a substantial increase in earnings relative to interest payments, indicating a very comfortable financial position in terms of meeting debt obligations.

However, by December 31, 2023, there was a notable decline in the interest coverage ratio to 16.37. This decrease suggests that Monster Beverage Corp's earnings were only 16.37 times its interest expenses, indicating a potential strain on the company's ability to comfortably cover its interest payments.

Subsequently, as of December 31, 2024, the interest coverage ratio recovered to 32.63, showing an improvement from the previous year but not reaching the peak levels seen in 2022. Overall, the data reveals fluctuations in Monster Beverage Corp's ability to cover its interest expenses, with periods of strong coverage followed by a slight dip in financial health.