AutoNation Inc (AN)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 5.29 | 5.42 | 4.91 | 3.76 | 3.06 |
AutoNation Inc has demonstrated strong solvency ratios over the past five years. The Debt-to-assets ratio, Debt-to-capital ratio, and Debt-to-equity ratio have all consistently remained at 0.00, indicating that the company has not relied heavily on debt to finance its operations. This portrays a healthy financial position with a low level of financial risk.
However, the Financial leverage ratio has shown an increasing trend from 3.06 in 2020 to 5.29 in 2024. This suggests that the company's reliance on debt to finance its assets and operations has been increasing over the years, which could potentially increase the financial risk for the company in the long run.
Overall, while the debt-related ratios are favorable, the increasing trend in the Financial leverage ratio warrants close monitoring to ensure that AutoNation Inc maintains a balanced capital structure and manages its debt levels effectively.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 3.09 | 5.07 | 11.17 | 16.02 | 4.09 |
AutoNation Inc's interest coverage ratio has shown varying levels over the past five years. The ratio was 4.09 as of December 31, 2020, indicating that the company's operating income was able to cover its interest expenses approximately four times. This suggests a moderate ability to meet interest obligations.
The interest coverage ratio significantly improved to 16.02 as of December 31, 2021, signaling a substantial strengthening of AutoNation Inc's ability to cover interest costs with operating income. This high ratio indicates a robust capacity to pay off interest expenses comfortably.
By December 31, 2022, the interest coverage ratio decreased to 11.17, although it remained at a healthy level. This suggests that the company's earnings were still sufficient to cover its interest charges adequately.
As of December 31, 2023, the interest coverage ratio further declined to 5.07, indicating a decrease in the company's ability to cover interest expenses with operating income compared to the previous year. Although the ratio dropped, it still suggests a reasonable ability to meet interest obligations.
On December 31, 2024, the interest coverage ratio decreased to 3.09, indicating a significant decline in AutoNation Inc's ability to cover interest expenses with operating income. This lower ratio may signal increased financial risk as it implies that the company's earnings may be less able to cover interest costs adequately.
Overall, fluctuations in AutoNation Inc's interest coverage ratio over the past five years reflect varying levels of financial health and risk associated with the company's ability to meet its interest obligations.