ArcBest Corp (ARCB)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.07 | 0.08 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.12 | 0.15 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.13 | 0.17 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 2.00 | 2.17 | 2.27 | 2.15 | 2.16 |
Based on the solvency ratios of ArcBest Corp over the past five years, we can observe a favorable trend in the company's solvency position. The debt-to-assets ratio has decreased from 0.20 in 2019 to 0.09 in 2023, indicating that the company's reliance on debt to finance its assets has significantly decreased.
Similarly, the debt-to-capital ratio and the debt-to-equity ratio have shown a decreasing trend over the years, reflecting a strengthening financial position. The debt-to-capital ratio decreased from 0.30 in 2019 to 0.16 in 2023, and the debt-to-equity ratio decreased from 0.42 in 2019 to 0.18 in 2023. These reductions suggest that the company has been successful in lowering its debt levels relative to its capital and equity, which enhances its financial stability.
Furthermore, the financial leverage ratio, which measures the company's total assets relative to shareholders' equity, has shown fluctuations over the years but remains relatively stable at around 2.00 to 2.27. This indicates that the company has effectively managed its leverage to support its operations and growth while maintaining a sound balance between debt and equity funding.
Overall, the improving trend in solvency ratios reflects positively on ArcBest Corp's ability to meet its financial obligations and indicates a more robust financial position, which may enhance its long-term sustainability and ability to weather economic uncertainties.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 19.37 | 51.85 | 31.56 | 8.40 | 5.56 |
The interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt, indicating its financial health and ability to manage debt effectively. Higher ratios are generally favorable as they suggest the company is generating sufficient earnings to cover interest expenses.
ArcBest Corp's interest coverage has fluctuated over the past five years. In 2019, the ratio stood at 5.56, indicating the company's earnings could cover its interest payments 5.56 times over. By 2020, the ratio improved to 8.40, pointing to a stronger ability to meet interest obligations.
The company's interest coverage ratio further increased to 31.56 in 2021, reflecting a significant improvement in its financial position and ability to service debt. However, the interest coverage ratio for 2022 is not available, making it difficult to assess the company's performance for that year.
In 2023, ArcBest Corp's interest coverage ratio notably decreased to 18.98, which, although lower than the previous year, still indicates a solid ability to meet interest payments. Overall, the company has demonstrated strong interest coverage ratios in recent years, implying effective management of debt and sufficient earnings to cover interest expenses.