Shake Shack Inc (SHAK)
Interest coverage
| 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 23, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 17,971 | 12,461 | 815 | -7,051 | -20,891 | -23,263 | -22,610 | -19,150 | -14,302 | -20,817 | -24,626 | -49,781 | -41,286 | -27,363 | -13,817 | 18,221 | 23,647 | 25,045 | 25,570 | 25,850 |
| Interest expense (ttm) | US$ in thousands | 1,717 | 1,614 | 1,656 | 1,566 | 1,518 | 1,498 | 1,373 | 1,417 | 1,577 | 1,342 | 1,135 | 1,218 | 815 | 829 | 819 | 474 | 434 | 947 | 1,406 | 1,922 |
| Interest coverage | 10.47 | 7.72 | 0.49 | -4.50 | -13.76 | -15.53 | -16.47 | -13.51 | -9.07 | -15.51 | -21.70 | -40.87 | -50.66 | -33.01 | -16.87 | 38.44 | 54.49 | 26.45 | 18.19 | 13.45 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $17,971K ÷ $1,717K
= 10.47
Shake Shack Inc's interest coverage ratio has exhibited fluctuations over the past few periods. The interest coverage ratio measures a company's ability to meet its interest payment obligations on outstanding debt. A higher ratio indicates a stronger ability to cover interest expenses.
Looking at the trend in Shake Shack Inc's interest coverage ratio, it is evident that there have been periods of both strength and weakness. In the most recent period as of December 31, 2023, the interest coverage ratio stands at 10.47, which indicates a healthy ability to cover its interest payments.
However, there was a significant decline in the interest coverage ratio in the previous periods, particularly in March and June 2023, where the ratio dropped to 0.49 and -4.50, respectively. These periods suggest a potential strain on the company's ability to cover its interest expenses.
It is important to note that negative interest coverage ratios, such as those seen in March 2023 and beyond, indicate that the company's operating income was insufficient to cover its interest expenses. This raises concerns about the company's financial health and its ability to service its debt.
Overall, the trend in Shake Shack Inc's interest coverage ratio indicates fluctuating levels of financial strength and suggests the importance of closely monitoring the company's ability to manage its debt obligations.
Peer comparison
Dec 31, 2023