MNST — Monster Beverage Corp.

Will it survive?

• Can it pay its interest? —
  No meaningful interest burden
  Little or no interest expense reported

  Little or no interest expense reported — the business isn't leaning on lenders to operate.

• How heavy is the debt? 0.2×
  Conservative
  Total debt $374M ÷ operating income $2.4B

  Years of operating profit it would take to repay all debt. A first read, not a credit rating: it's gross debt (not netted against cash) over EBIT (not EBITDA), and a cyclical year distorts it.

• How long is cash tied up? 94d
  Capital-hungry
  DSO 71 + DIO 80 − DPO 56 days

  Days cash is tied up between paying suppliers and collecting from customers. Lower is better; a long cycle means growth itself eats cash.

Is it a good business?

• Return on invested capital 29%
  Exceptional
  NOPAT $1.9B ÷ invested capital $6.5B (debt + equity − cash)

  The rate the business earns on the money tied up in it — Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; below ~8% the company may destroy value as it grows. Asset-light businesses (R&D expensed, little capital) read artificially high — pair this with Owner Earnings.

• Owner Earnings (free cash) margin 24%
  Cash machine
  Owner Earnings $2.0B = operating cash $2.1B − capex $132M

  What an owner could take out without starving the business. That's 24% of revenue. Treating stock comp as the real expense it is (less $126M of SBC) leaves $1.8B. Honest caveat: capex here blends maintenance and growth, so steady-state Owner Earnings may run higher (see capex vs. depreciation).

• Are earnings backed by cash? —
  Not enough data

  The filing data didn't include the inputs for this check.

How is the cash used?

• Where do the earnings go? 5%
  Reinvests most of it
  Dividends + buybacks $104M ÷ Owner Earnings $2.0B

  Of $2.0B Owner Earnings, $104M (5%) went back to shareholders — $0 dividends, $104M buybacks. But the buybacks barely exceed stock issued to employees ($126M SBC) — net of dilution, little was truly returned. Returning most of it signals a mature cash machine; reinvesting most could mean a long runway — or empire-building. The split doesn't say which; the return earned on it (see ROIC) does.

• Investing or harvesting? 1.16×
  Maintaining
  Capex $132M ÷ depreciation $114M

  Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth — or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency — or a melting asset base). The ratio won't tell you which; the filings will.

Durability — 2018–2025

A moat is high return that doesn’t fade. Here are the quality metrics across a full cycle — judge the consistency, not the latest dot.

• Return on invested capital ≥15% in 2 of 2 years
  29%
• Operating margin
  29%
• Owner Earnings margin
  24%