AutoNation Inc (AN)
Solvency ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 5.42 | 5.25 | 5.30 | 5.13 | 4.91 | 4.17 | 4.00 | 3.99 | 3.76 | 3.45 | 2.93 | 2.90 | 3.06 | 2.85 | 3.01 | 3.71 | 3.33 | 3.49 | 3.71 | 3.92 |
The solvency ratios of Autonation Inc. provide insights into the company's ability to meet its long-term financial obligations.
1. Debt-to-assets ratio: This ratio measures the proportion of a company's assets financed by debt. Autonation's debt-to-assets ratio has been gradually increasing from Q1 2022 to Q4 2023, indicating that a higher percentage of the company's assets are funded by debt. The increase may suggest a growing reliance on debt financing over the periods analyzed.
2. Debt-to-capital ratio: This ratio reflects the proportion of a company's capital structure that is funded by debt. Autonation's debt-to-capital ratio has also been on an upward trend during the periods reported. The increasing ratio implies that a larger portion of the company's capital comes from debt, which may raise concerns about the company's financial leverage and risk exposure.
3. Debt-to-equity ratio: This ratio illustrates the extent to which a company is leveraged with debt relative to its equity. Autonation's debt-to-equity ratio has shown a consistent increase from Q1 2022 to Q4 2023, indicating a higher level of debt relative to equity over time. This rising trend highlights the company's growing reliance on debt to finance its operations and investments.
4. Financial leverage ratio: This ratio measures a company's total debt relative to its equity and indicates the extent to which debt is used to finance the company's assets. Autonation's financial leverage ratio has been steadily increasing from Q1 2022 to Q4 2023, reflecting a higher level of financial risk as debt levels outpace equity growth. This trend suggests that the company's financial structure may be becoming more leveraged and potentially more vulnerable to changes in interest rates or economic conditions.
Overall, the increasing trend in Autonation's solvency ratios indicates a higher reliance on debt financing over time, which may signal increased financial risk and potential challenges in meeting debt obligations in the future. Investors and stakeholders should closely monitor these ratios to assess the company's solvency and financial health.
Coverage ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 8.23 | 9.14 | 10.53 | 12.04 | 13.46 | 16.03 | 17.12 | 18.92 | 18.69 | 17.30 | 14.99 | 11.32 | 5.57 | 4.96 | 3.97 | 3.83 | 7.33 | 6.87 | 6.96 | 6.73 |
Autonation Inc.'s interest coverage ratio has shown a declining trend over the past eight quarters. The interest coverage ratio, a measure of the company's ability to meet its interest payments on outstanding debt, decreased from 16.79 in Q1 2022 to 5.08 in Q4 2023. This indicates that the company's ability to cover its interest expenses with its earnings has weakened over time.
The decreasing trend in the interest coverage ratio suggests that Autonation Inc. may be taking on more debt relative to its earnings, which could increase its financial risk. A lower interest coverage ratio indicates a higher financial risk as the company may struggle to meet its interest obligations.
It is important for investors and stakeholders to closely monitor Autonation Inc.'s interest coverage ratio and assess the reasons behind the decline to understand the company's financial health and ability to service its debt obligations.