ArcBest Corp (ARCB)

ArcBest Corp's solvency ratios indicate the company's ability to meet its long-term financial obligations. The Debt-to-assets ratio has shown a slight increase from 0.00 in 2020 and 2021 to 0.08 in 2022, followed by a decrease to 0.07 in 2023 and further to 0.05 in 2024. This suggests that the company has increased its debt relative to its assets in recent years but has been able to manage this ratio downwards over time.

The Debt-to-capital ratio has also displayed a similar trend, rising from 0.00 in 2020 and 2021 to 0.15 in 2022, declining to 0.12 in 2023, and further decreasing to 0.09 in 2024. This indicates that ArcBest Corp has been utilizing more debt in its capital structure, but it has been decreasing this reliance on debt over the years.

Similarly, the Debt-to-equity ratio has seen an uptrend from 0.00 in 2020 and 2021 to 0.17 in 2022, then decreasing to 0.13 in 2023, and finally dropping to 0.10 in 2024. This shows that the company has been leveraging more debt relative to equity, but it has been managing this ratio down consistently.

The Financial leverage ratio, which measures the company's ability to meet its financial obligations through debt financing, has decreased from 2.15 in 2020 to 1.85 in 2024. This indicates an improvement in the company's ability to cover its financial obligations using debt.

Overall, ArcBest Corp has shown a mixed solvency performance in recent years, with increasing debt levels initially but successfully managing and reducing debt ratios over time, demonstrating an improving solvency position.

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Coverage ratios

Interest coverage ratio is a financial metric that indicates a company's ability to pay interest expenses on its outstanding debt. It is calculated by dividing earnings before interest and taxes (EBIT) by the interest expense. A higher interest coverage ratio implies a better ability to meet interest obligations.

Analyzing the interest coverage ratios of ArcBest Corp from 2020 to 2024, we observe the following trend:

- As of December 31, 2020, the interest coverage ratio was 8.40, indicating that ArcBest Corp generated 8.40 times the earnings necessary to cover its interest expenses.

- By December 31, 2021, the interest coverage ratio significantly improved to 31.56, reflecting a substantial increase in the company's ability to meet its interest obligations.

- The ratio continued to strengthen in the following years, reaching 51.85 by December 31, 2022, indicating a robust ability to cover interest expenses.

- However, there was a slight decrease in the interest coverage ratio by December 31, 2023, standing at 19.37. While still at a healthy level, it suggests a decrease in the company's ability to cover interest expenses compared to the previous year.

- The ratio improved again by December 31, 2024, with a value of 27.22, indicating a better ability to handle interest payments compared to the previous year, but still slightly lower than the peak in 2022.

Overall, the trend in ArcBest Corp's interest coverage ratio shows fluctuations over the years but generally demonstrates an improving ability to meet interest obligations, with some variations in certain years that may warrant further investigation into the company's financial health and debt management strategies.