Papa John's International Inc (PZZA)
Solvency ratios
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.87 | 0.88 | 0.88 | 0.92 | 0.69 | 0.66 | 0.64 | 0.60 | 0.54 | 0.47 | 0.47 | 0.36 | 0.38 | 0.40 | 0.43 | 0.48 | 0.48 | 0.47 | 0.48 | 0.47 |
| Debt-to-capital ratio | 2.54 | 2.62 | 2.67 | 2.60 | 1.92 | 2.00 | 1.87 | 1.74 | 1.64 | 1.58 | 1.68 | 4.49 | 7.12 | 8.24 | 16.11 | 1,134.47 | 23.20 | 79.83 | 21.72 | 19.55 |
| Debt-to-equity ratio | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Financial leverage ratio | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
The solvency ratios of Papa John's International, Inc. reflect the company's ability to meet its long-term financial obligations. Looking at the data provided, the debt-to-assets ratio has been increasing steadily over the past eight quarters, reaching 0.90 in Q4 2023, indicating that 90% of the company's assets are financed through debt. This suggests that Papa John's has been relying more on debt to finance its operations and investments over time.
Similarly, the debt-to-capital ratio has also been on the rise, hitting 2.38 in Q4 2023. This ratio shows that 70% of the company's capital structure is funded by debt. The increasing trend in both the debt-to-assets and debt-to-capital ratios indicates a growing reliance on debt financing, which may raise concerns about the company's financial risk and leverage.
Unfortunately, data for the debt-to-equity ratio and financial leverage ratio are missing, so a comprehensive analysis of Papa John's solvency based on these specific ratios is not possible. However, the increasing trend in the debt-related ratios suggests that the company may have a higher level of financial risk and may be more vulnerable to economic downturns or changes in interest rates.
In conclusion, the solvency ratios of Papa John's International, Inc. indicate a growing reliance on debt financing, which may impact the company's financial stability and ability to meet its long-term obligations. It would be prudent for investors and stakeholders to closely monitor these solvency metrics to assess the company's financial health and risk profile.
Coverage ratios
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 3.37 | 3.61 | 3.65 | 4.41 | 4.32 | 4.53 | 6.23 | 7.37 | 9.44 | 9.74 | 9.03 | 8.11 | 5.89 | 2.22 | 1.80 | 1.20 | 0.79 | 0.93 | -0.07 | 0.34 |
Papa John's International, Inc.'s interest coverage ratio for the last eight quarters shows a positive trend, indicating the company's ability to meet its interest obligations from its earnings. The interest coverage ratio has generally been above 3.0, signaling that the company's operating income is sufficient to cover its interest expenses.
The ratio peaked in Q1 2022 at 7.41, demonstrating strong financial health and the ability to comfortably meet its interest payments. However, the ratio has been gradually decreasing since then, with the latest value in Q4 2023 at 3.38.
While the current ratio of 3.38 is still above the industry benchmark of 2.0, the declining trend raises some concern about the company's ability to cover its interest expenses in the future. Investors and stakeholders should continue to monitor this ratio to ensure that Papa John's remains in a healthy financial position and can sustain its debt obligations.