Shake Shack Inc (SHAK)

Interest coverage ratio measures a company's ability to meet its interest obligations with its operating income. A higher ratio indicates a healthier financial position. Looking at Shake Shack Inc's interest coverage over multiple years, there seems to be some volatility in the company's ability to cover its interest expenses.

In December 31, 2020, the interest coverage ratio was -54.80, indicating that the company's operating income was insufficient to cover its interest payments. This could be a sign of potential financial distress.

The ratio improved slightly in December 31, 2021, to -9.99, but still remains negative, indicating ongoing challenges in meeting interest obligations.

In December 31, 2022, the interest coverage ratio further improved to -15.00, although it remains negative. The company may still be struggling to generate enough income to cover its interest expenses.

However, there was a notable improvement in December 31, 2023, with an interest coverage ratio of 10.89. This suggests that Shake Shack Inc's operating income was significantly higher compared to its interest expenses during that period.

In December 31, 2024, the interest coverage ratio stood at 7.97, indicating that the company's ability to cover its interest payments remained relatively strong, although slightly lower compared to the previous year.

Overall, Shake Shack Inc's interest coverage ratio has shown variability over the years, with improvements in recent periods but historical challenges in meeting interest obligations. Monitoring this ratio will be crucial to assess the company's financial stability and ability to service its debt in the future.

Peer comparison

Dec 31, 2024