ANGI Homeservices Inc (ANGI)
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 | 1.72 | 1.78 | 1.82 | 1.77 | 1.86 |
The analysis of ANGI Homeservices Inc.'s solvency ratios over the period from December 31, 2020, to December 31, 2024, reveals notable insights into its financial stability and leverage.
Firstly, the debt-to-assets ratio, debt-to-capital ratio, and debt-to-equity ratio consistently register at zero throughout all the observed periods. This indicates that the company has not utilized debt financing at any of these points, suggesting that its capital structure is entirely equity-financed. Such a debt-free capital structure minimizes financial risk associated with interest obligations and debt repayment requirements, indicating a conservative approach to financing.
In contrast, the financial leverage ratio exhibits a stable yet slightly declining trend, decreasing from 1.86 in 2020 to 1.72 in 2024. The ratios suggest that, relative to its equity, the company maintains a moderate level of financial leverage, albeit with minimal variation. The leverage ratio being above 1 indicates that the company's total assets are greater than its equity, but the relatively low and stable nature of this ratio, combined with the absence of debt, suggests that the company relies predominantly on equity and internal funding for its operations.
Overall, the absence of debt and the stable leverage ratio reflect a conservative and solvent financial position. The company maintains strong solvency, with no evident dependence on external debt to finance its assets, potentially reducing financial stress during economic downturns. However, this also implies a limited use of leverage to potentially enhance growth, which could influence the company's growth strategies and returns on equity over time.
Coverage ratios
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
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Interest coverage | 2.00 | -0.40 | -3.70 | -3.36 | -0.36 |
The interest coverage ratio of ANGI Homeservices Inc over the indicated periods demonstrates significant volatility and recurring challenges in meeting interest obligations solely from operating earnings. As of December 31, 2020, the company exhibited a negative interest coverage ratio of -0.36, indicating that its earnings before interest and taxes (EBIT) were insufficient to cover interest expenses, resulting in an interest coverage deficit. This negative trend persisted through December 31, 2021, with a notable deterioration to -3.36, and similarly, at December 31, 2022, with a ratio reaching -3.70, further underscoring the company's ongoing struggles to generate adequate operating income relative to interest obligations.
By December 31, 2023, the negative interest coverage persisted but improved markedly to -0.40, suggesting a slight reduction in the magnitude of the deficit yet still indicating insufficient EBIT to cover interest expenses. This persistent negative pattern reflects that during these years, the company was heavily reliant on sources other than operating income, such as financing or deferred payments, to meet interest obligations, which is typically viewed as a risk factor from a credit perspective.
The data indicates a positive turnaround in the fiscal year ending December 31, 2024, with the interest coverage ratio reaching 2.00. This marks a significant improvement, suggesting that the company's EBIT was sufficient to cover its interest expenses twice over, reflecting a period of enhanced operational performance and financial stability. This positive ratio could be indicative of strategic operational improvements, cost management, or revenue growth, which collectively contributed to restoring the company's ability to service interest obligations from core earnings.
Overall, the historical trend depicts a period of financial distress characterized by negative interest coverage ratios, followed by a notable recovery in 2024. The company's capacity to generate sufficient operating income to comfortably cover interest expenses in 2024 reflects a positive development from the previous years' challenges, potentially improving its creditworthiness. However, the prior recurrent negative ratios highlight the importance of ongoing operational improvement and risk management to sustain this improved interest coverage level.