American Airlines Group (AAL)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.06 | 0.54 | 0.56 | 0.52 | 0.39 |
| Debt-to-capital ratio | — | 1.20 | 1.24 | 1.27 | 1.01 |
| Debt-to-equity ratio | — | — | — | — | — |
| Financial leverage ratio | — | — | — | — | — |
The solvency ratios of American Airlines Group Inc indicate the company's ability to meet its long-term financial obligations and the level of financial risk it carries.
The debt-to-assets ratio has shown a slight decrease from 0.55 in 2022 to 0.52 in 2023, indicating that the company relies less on debt financing to support its assets. Despite fluctuating over the years, the downward trend in 2023 suggests improved asset coverage and lower financial risk.
The debt-to-capital ratio has remained relatively stable around 1.19 to 1.27 over the past five years, indicating that American Airlines Group Inc finances a significant portion of its operations with debt compared to equity. This suggests a moderate level of financial leverage and reliance on external financing sources.
The absence of data for the debt-to-equity ratio and financial leverage ratio limits a comprehensive evaluation of the company's solvency. These ratios are commonly used to assess the proportion of debt relative to equity and the overall financial risk of the company, respectively. Without this information, a complete analysis of American Airlines Group Inc's solvency position is restricted.
In conclusion, while the debt-to-assets and debt-to-capital ratios provide some insights into the company's solvency, the lack of data for other key ratios hinders a thorough assessment of American Airlines Group Inc's overall financial stability and risk profile.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 1.52 | 1.09 | -0.42 | -8.33 | 3.06 |
American Airlines Group Inc's interest coverage ratio has been fluctuating over the past five years. In 2023, the interest coverage ratio improved to 2.58, indicating the company's ability to meet its interest obligations from operating profits. However, this improvement follows a significant decline in 2022, where the ratio was only 1.03, suggesting a tighter margin of safety in meeting interest payments.
The years 2020 and 2021 show negative interest coverage ratios of -9.34 and -2.84, respectively. These negative ratios indicate that the company's operating income was insufficient to cover its interest expenses during those years. This is a concerning trend as it indicates financial distress and potential difficulties in meeting debt obligations.
In contrast, the interest coverage ratio was positive and healthy in 2019 at 3.82, indicating a stronger ability to cover interest payments with operating income. Overall, the fluctuating nature of American Airlines Group Inc's interest coverage ratio highlights the company's vulnerability to changes in operating performance and emphasizes the importance of closely monitoring its financial health.