Compass Group (LSE:CPG) Debt-to-EBITDA

: 1.66 (As of Sep. 2023)

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Debt-to-EBITDA measures a company's ability to pay off its debt.

Compass Group's Short-Term Debt & Capital Lease Obligation for the quarter that ended in Sep. 2023 was £1,281 Mil. Compass Group's Long-Term Debt & Capital Lease Obligation for the quarter that ended in Sep. 2023 was £3,034 Mil. Compass Group's annualized EBITDA for the quarter that ended in Sep. 2023 was £2,600 Mil. Compass Group's annualized Debt-to-EBITDA for the quarter that ended in Sep. 2023 was 1.66.

A high Debt-to-EBITDA ratio generally means that a company may spend more time to paying off its debt. According to Joel Tillinghast's BIG MONEY THINKS SMALL: Biases, Blind Spots, and Smarter Investing, a ratio of Debt-to-EBITDA exceeding four is usually considered scary unless tangible assets cover the debt.

The historical rank and industry rank for Compass Group's Debt-to-EBITDA or its related term are showing as below:

LSE:CPG' s Debt-to-EBITDA Range Over the Past 10 Years
Min: 1.59 Med: 1.82 Max: 4.03
Current: 1.73

During the past 13 years, the highest Debt-to-EBITDA Ratio of Compass Group was 4.03. The lowest was 1.59. And the median was 1.82.

LSE:CPG's Debt-to-EBITDA is ranked better than
68.5% of 273 companies
in the Restaurants industry
Industry Median: 2.97 vs LSE:CPG: 1.73

Compass Group Debt-to-EBITDA Historical Data

The historical data trend for Compass Group's Debt-to-EBITDA can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Compass Group Annual Data

Trend

Sep14

Sep15

Sep16

Sep17

Sep18

Sep19

Sep20

Sep21

Sep22

Sep23

Debt-to-EBITDA

1.73

4.03

3.32

2.10

1.59

Compass Group Semi-Annual Data
	Mar14	Sep14	Mar15	Sep15	Mar16	Sep16	Mar17	Sep17	Mar18	Sep18	Mar19	Sep19	Mar20	Sep20	Mar21	Sep21	Mar22	Sep22	Mar23	Sep23
Debt-to-EBITDA																3.63	2.19	2.06	1.81	1.66

Competitive Comparison

For the Restaurants subindustry, Compass Group's Debt-to-EBITDA, along with its competitors' market caps and Debt-to-EBITDA data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Compass Group Debt-to-EBITDA Distribution

For the Restaurants industry and Consumer Cyclical sector, Compass Group's Debt-to-EBITDA distribution charts can be found below:

* The bar in red indicates where Compass Group's Debt-to-EBITDA falls into.

Compass Group Debt-to-EBITDA Calculation

Debt-to-EBITDA measures a company's ability to pay off its debt.

Compass Group's Debt-to-EBITDA for the fiscal year that ended in Sep. 2023 is calculated as

Debt-to-EBITDA	=	Total Debt			/	EBITDA
	=	(Short-Term Debt & Capital Lease Obligation	+	Long-Term Debt & Capital Lease Obligation)	/	EBITDA
	=	(1281	+	3034)	/	2720
	=	1.59

Compass Group's annualized Debt-to-EBITDA for the quarter that ended in Sep. 2023 is calculated as

Debt-to-EBITDA	=	Total Debt			/	EBITDA
	=	(Short-Term Debt & Capital Lease Obligation	+	Long-Term Debt & Capital Lease Obligation)	/	EBITDA
	=	(1281	+	3034)	/	2600
	=	1.66

In the calculation of annual Debt-to-EBITDA, the EBITDA of the last fiscal year is used. In calculating the annualized quarterly data, the EBITDA data used here is two times the quarterly (Sep. 2023) EBITDA data.

Compass Group (LSE:CPG) Debt-to-EBITDA Explanation

In the calculation of Debt-to-EBITDA, we use the total of Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation divided by EBITDA. In some calculations, Total Liabilities is used to for calculation.

Be Aware

A high Debt-to-EBITDA ratio generally means that a company may spend more time to paying off its debt.

According to Joel Tillinghast's BIG MONEY THINKS SMALL: Biases, Blind Spots, and Smarter Investing, a ratio of Debt-to-EBITDA exceeding four is usually considered scary unless tangible assets cover the debt.

Compass Group Debt-to-EBITDA Related Terms

Thank you for viewing the detailed overview of Compass Group's Debt-to-EBITDA provided by GuruFocus.com. Please click on the following links to see related term pages.

Compass Group (LSE:CPG) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Restaurants » Compass Group PLC (LSE:CPG) » Definitions » Debt-to-EBITDA

Comparable Companies

Traded in Other Exchanges

CMPGY:USA CMPGF:USA CPG:Mexico CPGl:UK XGR2:Germany

Address

Guildford Street, Compass House, Chertsey, Surrey, GBR, KT16 9BQ

Website

https://www.compass-group.com

Compass Group is the largest food-service company globally, operating in more than 50 countries with annual sales of more than GBP 25 billion. Compass Group's model stems from operating on-premises catering facilities, rather than centralised industrial kitchens. Food service is Compass' core focus and contributes more than 80% of revenue. In addition, the company provides support services to clients through activities including cleaning services, office services (for example, concierge services), grounds maintenance, and so on.