Appfolio Inc (APPF)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.18 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.26 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.36 |
| Financial leverage ratio | 1.38 | 1.44 | 1.37 | 1.36 | 1.97 |
Appfolio Inc has consistently maintained a very strong solvency position over the years, as indicated by its solvency ratios. The Debt-to-assets ratio, Debt-to-capital ratio, and Debt-to-equity ratio have all been reported as 0.00 for the past five years, reflecting that the company has no debt obligations in relation to its assets, capital, or equity. This signifies that the company has been funding its operations and investments primarily through equity and retained earnings rather than debt financing.
Additionally, Appfolio Inc's Financial leverage ratio has shown a decreasing trend from 2019 to 2023, decreasing from 1.97 to 1.38. This indicates that the company has been reducing its reliance on debt to finance its operations and investments, which is a positive sign of financial stability and lower risk. Overall, the solvency ratios suggest that Appfolio Inc has a very healthy financial position with minimal leverage and a strong ability to meet its financial obligations.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | — | -61.12 | -23.71 | 5.29 | 3.91 |
The interest coverage ratio for Appfolio Inc has shown fluctuations over the past five years. The trend indicates a significant improvement in the company's ability to cover its interest expenses from 2019 to 2020, with a notable increase in the ratio from 3.91 to 5.29. However, the ratio turned negative in 2021 and 2022, reflecting that the company's operating income was insufficient to cover its interest expenses during those years.
It is essential to note that a negative interest coverage ratio, as seen in 2021 and 2022, indicates a potentially risky situation for the company, as it suggests that Appfolio Inc may be facing challenges in meeting its interest obligations based on its current earnings. This could potentially strain the company's financial health and raise concerns for creditors.
Further analysis should be conducted to understand the reasons behind the negative interest coverage ratios in 2021 and 2022 and to assess the company's overall financial stability and ability to manage its debt obligations effectively.