Karat Packaging Inc. key statistics and ratios

In fiscal 2025, Karat Packaging Inc. had return on equity of 20.6%, an operating margin of 8.9%, debt equal to 24.0% of equity and a current ratio of 2.30. Each ratio below is calculated from the figures on its income statement, balance sheet and cash flow pages.

Financial ratios

US$ thousands unless shown otherwise. Fiscal years, plus the last twelve months (LTM) when newer.

Karat Packaging Inc.: financial ratios, annual
Fiscal year	2020Dec 2020	2021Dec 2021	2022Dec 2022	2023Dec 2023	2024Dec 2024	2025Dec 2025	LTMJun 2026
Gross margin	30.2%	29.6%	31.2%	37.7%	38.9%	36.8%	40.7%
Operating margin	9.4%	6.4%	7.1%	10.4%	8.9%	8.9%	12.8%
Net margin	5.9%	5.7%	5.6%	8.0%	7.1%	6.7%	10.2%
Free-cash-flow margin	−5.1%	1.2%	6.3%	12.5%	11.1%	7.1%	11.3%
Return on equity	54.1%	26.8%	17.9%	22.0%	19.4%	20.6%	31.8%
Return on assets	9.7%	10.7%	10.3%	12.3%	10.5%	10.8%	16.6%
Asset turnover	1.63	1.87	1.84	1.53	1.48	1.61	1.63
Current ratio	1.85	3.34	3.15	3.49	3.47	2.30	2.25
Debt to equity	200.2%	29.9%	30.2%	32.3%	31.2%	24.0%	20.8%
Interest cover (operating income ÷ interest)	—	8.0x	14.9x	20.6x	17.8x	20.2x	33.9x
Effective tax rate	24.0%	18.5%	20.5%	22.8%	24.3%	24.1%	24.1%
Capital spending as % of revenue	10.0%	1.1%	0.6%	0.7%	0.2%	0.2%	0.2%
Free cash flow ÷ net income	−85.6%	21.7%	113.4%	155.7%	157.0%	105.0%	110.7%
Dividends ÷ net income	3.5%	0.0%	29.4%	64.4%	103.5%	114.7%	71.7%
Dividends and buybacks ÷ free cash flow	—	0.0%	26.0%	41.4%	65.9%	118.3%	64.8%

US$ thousands unless shown otherwise. Fiscal quarters.

Karat Packaging Inc.: financial ratios, quarterly
Quarter	2024 Q3Sept 2024	2024 Q4Dec 2024	2025 Q1Mar 2025	2025 Q2Jun 2025	2025 Q3Sept 2025	2025 Q4Dec 2025	2026 Q1Mar 2026	2026 Q2Jun 2026
Gross margin	38.6%	39.2%	39.3%	39.6%	34.5%	34.0%	35.5%	56.6%
Operating margin	10.0%	7.2%	7.5%	13.3%	6.9%	7.3%	7.2%	27.6%
Net margin	8.1%	5.5%	6.2%	8.8%	5.9%	5.9%	5.8%	21.5%
Free-cash-flow margin	17.0%	7.9%	7.4%	7.7%	0.6%	13.1%	5.7%	24.3%
Current ratio	3.12	3.47	2.86	2.68	2.14	2.30	2.29	2.25
Debt to equity	0.7%	0.8%	0.8%	0.8%	13.7%	8.7%	8.6%	7.3%

Returns use average equity or assets over the year. Return on equity is left blank when equity is negative or so small that the ratio says nothing (above ±200%); interest cover is left blank above 200 times. Price-based ratios such as P/E are on the valuation page.

Financial health

3 of 3 checks passed · June 30, 2026

What it owns · $317m

Short-term assets $199mLonger-term assets $117m

What it owes, and who funded it · $309m

Short-term liabilities $89mLonger-term liabilities $54mShareholders' equity $166m

Short-term assets cover short-term liabilities $199m of assets due within a year against $89m of liabilities due within a year.
Short-term assets cover long-term liabilities $199m short-term assets against $54m of longer-dated liabilities.
More cash than debt Cash or debt not separately reported. Not assessable.
Debt below 40% of shareholders' equity Equity or debt not reported. Not assessable.
Debt burden no higher than five years ago Five-year comparison not available. Not assessable.
A year's operating cash flow covers at least 20% of debt Cash flow or debt not reported. Not assessable.
Operating profit covers interest at least five times over Operating income of $63m against $2m of interest.

From Karat Packaging Inc.'s latest balance sheet as filed. Checks are fixed, documented rules (methodology), counted only where the company reports the figures — a dot means the filing doesn't break the item out. Descriptions of reported data, not advice.

Moat

60 /100

Moderate moat

How hard Karat Packaging's competitive advantage looks for rivals to wear away, judged from 6 years of its own filings: returns on capital, pricing power, profit durability, cash conversion and discipline.

Returns on capital 15 / 20

Net income has been a median 9.5% of total assets over 6 years.
Pricing power 11 / 20

Gross margin has been a median 36.5%, moving by 4.3 percentage points (standard deviation) across 6 years.
Durability 11 / 20

Operating margin has been a median 9.1%; its worst year was 6.2%.
Cash conversion 13 / 20

Free cash flow was positive in 5 of 6 years, at a median 10.0% of revenue.
Discipline 10 / 20

The diluted share count rose 23.3% over five years; stock-based pay has been a median 0.3% of revenue.

AI disruption exposure: Low. In this industry, the business rests on physical assets, regulated networks or products AI itself depends on.

A rules-based reading of reported figures, not a forecast and not investment advice. How the score is built: methodology.

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Figures from Karat Packaging Inc.'s SEC filings (10-K and 10-Q), retrieved October 29, 2026. How we read and check them: methodology and data sources. Not investment advice. Back to Karat Packaging Inc.