Shake Shack Inc (SHAK)
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 23, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 3.62 | 3.65 | 3.66 | 3.69 | 3.67 | 3.63 | 3.67 | 3.62 | 3.56 | 3.46 | 3.43 | 3.40 | 2.81 | 2.72 | 2.67 | 3.46 | 3.24 | 3.31 | 3.52 | 3.58 |
Based on the provided data, Shake Shack Inc's solvency ratios indicate a consistent trend of very low levels of debt in relation to its assets, capital, and equity. The debt-to-assets ratio, debt-to-capital ratio, and debt-to-equity ratio have all remained at 0.00 across the periods analyzed, suggesting that the company operates with minimal financial leverage.
However, the financial leverage ratio has varied over time, with values ranging from 2.67 to 3.69. This ratio measures the extent to which the company utilizes debt financing compared to equity, with higher values indicating higher financial leverage. Shake Shack's financial leverage ratio generally increased over the periods, reaching a peak of 3.69 at the end of December 2023, which indicates a slight increase in the company's reliance on debt to finance its operations.
Overall, while Shake Shack Inc maintains a conservative debt structure with almost no debt compared to its assets, capital, and equity, the increasing trend in the financial leverage ratio suggests a potential shift towards slightly higher leverage in recent periods. However, the company's solvency position remains strong, indicating a stable financial foundation.
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 23, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 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 |
The interest coverage ratio measures a company's ability to meet interest payments on its debt obligations. A higher ratio indicates a stronger ability to cover interest expenses.
Looking at Shake Shack Inc's interest coverage ratio over the past few quarters, we see fluctuations in the company's ability to cover its interest expenses. In the latest quarter, the interest coverage ratio was 10.47, showing that the company earned 10.47 times the amount needed to cover its interest payments, which indicates a strong ability to meet these obligations.
However, in the preceding quarters, particularly in March 2023 and December 2022, the interest coverage ratios were significantly lower, at 0.49 and -13.76 respectively. These figures indicate that the company struggled to cover its interest expenses during those periods.
It is important to note that a negative interest coverage ratio, as seen in some quarters, such as March 2023 and December 2022, signifies that Shake Shack Inc did not generate enough operating income to cover its interest expenses, which can raise concerns about its financial health and ability to service its debt.
Overall, Shake Shack Inc's interest coverage ratio has shown variability, with both strong and weak performances observed in different quarters. Investors and analysts should closely monitor the company's financial performance and debt levels to assess its ability to meet interest payments in the future.