Addus HomeCare Corporation (ADUS)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.15 | 0.12 | 0.14 | 0.23 | 0.22 |
| Debt-to-capital ratio | 0.18 | 0.15 | 0.17 | 0.28 | 0.27 |
| Debt-to-equity ratio | 0.23 | 0.18 | 0.21 | 0.38 | 0.37 |
| Financial leverage ratio | 1.46 | 1.45 | 1.48 | 1.65 | 1.72 |
Addus HomeCare Corporation's solvency ratios indicate a stable financial position over the years. The Debt-to-assets ratio has shown a decreasing trend from 0.22 in 2020 to 0.15 in 2024, signaling that the company's level of debt in relation to its total assets has decreased, which is a positive sign.
Similarly, the Debt-to-capital ratio and Debt-to-equity ratio have also exhibited a declining trend, decreasing from 0.27 to 0.18 and 0.37 to 0.23 respectively over the same period. These ratios demonstrate that the company has been reducing its reliance on debt financing in relation to its capital and equity, indicating improved financial stability.
Furthermore, the Financial leverage ratio has shown a consistent decline from 1.72 in 2020 to 1.46 in 2024. This indicates that the company has been effectively managing its financial leverage, which could lower financial risk and enhance its ability to meet its debt obligations.
Overall, the decreasing trends in the solvency ratios reflect positively on Addus HomeCare Corporation's financial health and suggest that the company is effectively managing its debt levels, capital structure, and financial leverage.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 13.28 | 8.32 | 7.76 | 11.40 | 14.15 |
The interest coverage trend for Addus HomeCare Corporation indicates a gradual decline from 14.15 in December 2020 to 7.76 in December 2022, followed by a slight improvement to 8.32 in December 2023, and a significant increase to 13.28 in December 2024.
The company's interest coverage ratio, a measure of its ability to meet interest payment obligations, has shown some volatility over the years. Despite the fluctuations, it is positive to see the ratio improve and ultimately climb above the industry benchmark of 2. This suggests that Addus HomeCare Corporation may have been managing its interest expenses more effectively in recent years, enhancing its financial strength and solvency. However, continued monitoring of this ratio is advised to ensure the company maintains a healthy and sustainable interest coverage level.