The Wendy’s Co (WEN)
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 | 396,294 | 403,479 | 365,824 | 292,415 | 255,194 |
| Interest expense | US$ in thousands | 123,881 | 124,061 | 122,319 | 109,185 | 117,737 |
| Interest coverage | 3.20 | 3.25 | 2.99 | 2.68 | 2.17 |
December 31, 2024 calculation
Interest coverage = EBIT ÷ Interest expense
= $396,294K ÷ $123,881K
= 3.20
The interest coverage ratio for The Wendy's Co has shown a positive trend over the past five years, indicating the company's ability to meet its interest obligations with its operating income.
Starting at 2.17 in December 31, 2020, the interest coverage ratio improved steadily to 2.68 in December 31, 2021, further increasing to 2.99 in December 31, 2022. The ratio continued its upward trend to 3.25 in December 31, 2023, before slightly decreasing to 3.20 in December 31, 2024.
Overall, the consistent growth in the interest coverage ratio suggests that The Wendy's Co has been effectively managing its interest expenses in relation to its operating income, indicating a healthier financial position and reduced risk of financial distress related to debt servicing obligations.
Peer comparison
Dec 31, 2024