Boston Beer Company Inc (SAM)
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 | 75,973 | 100,001 | 90,791 | 7,997 | 244,207 |
| Interest expense | US$ in thousands | — | 10,995 | 2,561 | 110 | 199 |
| Interest coverage | — | 9.10 | 35.45 | 72.70 | 1,227.17 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $75,973K ÷ $—K
= —
The interest coverage ratio is a financial metric used to evaluate a company's ability to meet its interest payments on outstanding debt. For Boston Beer Company Inc, the interest coverage ratio has experienced significant fluctuations over the years.
As of December 31, 2020, the interest coverage ratio stood at an exceptionally high level of 1,227.17, indicating that the company had more than enough earnings to cover its interest expenses. This suggests a strong financial position and low risk of default on debt obligations.
However, by December 31, 2021, the interest coverage ratio dropped significantly to 72.70, signaling a potential decrease in the company's ability to cover interest payments with its operating earnings. While still above 1, this decline raises concerns about the company's reduced ability to service its debt.
Moreover, the trend continued with a further decrease in the interest coverage ratio to 35.45 by December 31, 2022, and a sharper decline to 9.10 by December 31, 2023. These lower ratios indicate a higher risk of default on interest payments, as the company's earnings may not be sufficient to cover its financial obligations.
Unfortunately, the data for December 31, 2024, is not available (denoted as “—“), making it impossible to assess the company's interest coverage for that year.
In conclusion, Boston Beer Company Inc's interest coverage has displayed a concerning downward trend in recent years, with significant decreases in the ratio. Investors and stakeholders should closely monitor future financial performance to assess the company's ability to manage its debt and interest payments effectively.
Peer comparison
Dec 31, 2024