Monster Beverage Corp (MNST)

Interest coverage

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 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
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	1,945,548	2,015,259	2,045,870	2,041,844	1,982,757	1,910,094	1,799,931	1,632,171	1,534,156	1,559,641	1,591,341	1,749,239	1,765,696	1,748,986	1,775,523	1,669,512	1,633,154	1,547,898	1,484,740	1,456,466
Interest expense (ttm)	US$ in thousands	5,820	21,935	87,472	102,631	115,127	99,837	30,629	22,251	17,055	22,361	22,502	16,593	10,052	5,426	7,704	8,628	8,741	11,424	9,977	11,154
Interest coverage		334.29	91.87	23.39	19.90	17.22	19.13	58.77	73.35	89.95	69.75	70.72	105.42	175.66	322.33	230.47	193.50	186.84	135.50	148.82	130.58

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,945,548K ÷ $5,820K
= 334.29

The interest coverage ratio of Monster Beverage Corp indicates the company's ability to meet its interest obligations from its earnings before interest and taxes (EBIT). A higher interest coverage ratio is generally viewed positively as it suggests the company is more capable of servicing its debt.

Looking at the trend over the past few quarters, Monster Beverage Corp's interest coverage ratio has fluctuated. From March 31, 2020, to September 30, 2021, the interest coverage ratio showed a generally increasing trend, peaking at 322.33 on September 30, 2021. This indicates a strong ability to cover interest expenses with operating income during this period.

However, there was a significant decline in the interest coverage ratio in the subsequent quarters, with a notable decrease to 17.22 on December 31, 2023. Such a sharp decline may raise concerns about the company's ability to cover its interest expenses comfortably.

Although there was some recovery in the following quarters, with the interest coverage ratio climbing to 334.29 on December 31, 2024, it is important to monitor this ratio closely to ensure that Monster Beverage Corp maintains a healthy cushion to meet its interest obligations in the future.