Asbury Automotive Group Inc (ABG)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.37 | 0.44 | 0.34 | 0.34 |
| Debt-to-capital ratio | 0.00 | 0.50 | 0.62 | 0.58 | 0.60 |
| Debt-to-equity ratio | 0.00 | 1.02 | 1.66 | 1.38 | 1.52 |
| Financial leverage ratio | 3.13 | 2.76 | 3.78 | 4.06 | 4.50 |
Solvency ratios provide insights into a company's ability to meet its long-term financial obligations. Looking at Asbury Automotive Group Inc's solvency ratios over the past five years, we can observe some trends:
1. Debt-to-assets ratio: This ratio measures the proportion of a company's assets that are financed by debt. Asbury's debt-to-assets ratio has fluctuated over the years, ranging from 0.43 to 0.62. A higher ratio indicates a greater reliance on debt to fund assets, potentially increasing financial risk.
2. Debt-to-capital ratio: This ratio indicates the percentage of a company's capital that is financed by debt. Asbury's debt-to-capital ratio has also varied, showing a similar trend as the debt-to-assets ratio. Higher ratios suggest higher leverage and financial risk.
3. Debt-to-equity ratio: This ratio signifies the proportion of a company's financing that comes from debt relative to equity. Asbury's debt-to-equity ratio has shown significant fluctuations, ranging from 1.19 to 2.80. A higher ratio indicates higher financial leverage and potential instability in the company's capital structure.
4. Financial leverage ratio: This ratio measures the extent to which a company is using debt to finance its operations. Asbury's financial leverage ratio has decreased slightly over the years, signaling a more conservative approach to debt financing.
Overall, Asbury Automotive Group Inc's solvency ratios reflect a varying degree of leverage and financial risk over the past five years. Investors and stakeholders should monitor these ratios closely to assess the company's ability to maintain long-term financial stability and meet its debt obligations.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 5.84 | 9.21 | 7.83 | 6.22 | 5.54 |
The interest coverage ratio measures a company's ability to meet its interest obligations with its operating income. A higher ratio indicates a stronger ability to cover interest expenses.
Asbury Automotive Group Inc's interest coverage has shown a consistent upward trend over the past five years, improving from 3.59 in 2019 to 6.46 in 2023. This indicates that the company's operating income has been increasingly sufficient to cover its interest expenses.
The ratios of 7.90 in 2022 and 7.70 in 2021 reflect a healthy financial position, with substantial operating income available to service debt obligations. The slight decline to 6.46 in 2023 may raise some concerns, as it suggests a decrease in the company's ability to cover interest expenses compared to the previous years.
Overall, while Asbury Automotive Group Inc has generally maintained a strong interest coverage ratio, stakeholders should monitor future trends to ensure the company's financial health and debt servicing capabilities.