Adapthealth Corp (AHCO)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.46 | 0.41 | 0.42 | 0.43 | 0.72 |
| Debt-to-capital ratio | 0.59 | 0.50 | 0.51 | 0.69 | 1.04 |
| Debt-to-equity ratio | 1.44 | 1.00 | 1.06 | 2.19 | — |
| Financial leverage ratio | 3.09 | 2.43 | 2.55 | 5.11 | — |
The solvency ratios of AdaptHealth Corp have shown improvement over the years, indicating a strengthening financial position and lower financial risk.
The debt-to-assets ratio, which measures the proportion of total assets financed by debt, has been relatively stable around 0.45 to 0.48 over the past five years. This suggests that roughly 42% to 48% of the company's assets are funded by debt, with a slight increase in 2023.
The debt-to-capital ratio, which shows the percentage of capital that comes from debt, has also exhibited a positive trend, declining from 1.04 in 2019 to 0.60 in 2023. This signifies that the company has reduced its reliance on debt financing in relation to its total capital structure.
The debt-to-equity ratio, while showing variability in recent years, has notably decreased from 2.27 in 2020 to 1.49 in 2023. This points to a lower reliance on debt in comparison to shareholders' equity, indicating a more favorable position in terms of financial leverage.
The financial leverage ratio has also shown improvement, declining from 5.11 in 2020 to 3.09 in 2023. This metric reflects the company's ability to meet its financial obligations using debt, with the decreasing trend indicating a lower risk of financial distress.
Overall, the decreasing trend in debt ratios and financial leverage ratios suggests that AdaptHealth Corp has been effectively managing its debt levels and strengthening its solvency position over the years.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | -4.59 | 1.86 | 2.99 | -3.19 | 0.48 |
The interest coverage ratio of AdaptHealth Corp has shown some fluctuations over the past five years. The ratio was 1.78 in 2023, 1.74 in 2022, 2.26 in 2021, 1.38 in 2020, and 0.76 in 2019.
The interest coverage ratio measures a company's ability to meet its interest expenses with its operating income. A higher ratio indicates a stronger ability to cover interest payments.
Although the ratio has fluctuated, it generally remained above 1, indicating that AdaptHealth Corp generated enough operating income to cover its interest expenses in each of the past five years. However, a ratio closer to 2 or higher is generally considered more favorable as it provides a larger cushion to meet interest obligations.
Overall, a trend analysis of AdaptHealth Corp's interest coverage shows variability in the company's ability to cover interest payments but generally indicates an ability to meet its financial obligations from operating income.