Topbuild Corp (BLD)

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	0.27	0.28	0.29	0.30	0.31	0.32	0.33	0.33	0.34	0.22	0.23	0.24	0.24	0.25	0.26	0.27	0.27	0.27	0.27	0.28
Debt-to-capital ratio	0.35	0.36	0.38	0.41	0.42	0.44	0.45	0.46	0.47	0.30	0.32	0.33	0.34	0.35	0.36	0.37	0.38	0.38	0.38	0.39
Debt-to-equity ratio	0.54	0.57	0.62	0.68	0.73	0.78	0.82	0.85	0.89	0.43	0.46	0.49	0.51	0.54	0.57	0.59	0.61	0.60	0.62	0.64
Financial leverage ratio	2.01	2.08	2.17	2.28	2.39	2.46	2.54	2.57	2.60	2.00	2.03	2.07	2.09	2.14	2.19	2.23	2.26	2.25	2.26	2.31

Over the past eight quarters, TopBuild Corp's solvency ratios have shown a general trend of deteriorating solvency, indicating potential financial risk.

1. Debt-to-assets ratio: The ratio has been gradually increasing from 0.28 in Q4 2023 to 0.34 in Q1 2022. This suggests that a larger proportion of the company's assets is funded by debt, which may raise concerns about its ability to cover liabilities with available assets.

2. Debt-to-capital ratio: Similarly, the debt-to-capital ratio has shown a consistent increase from 0.36 in Q4 2023 to 0.47 in Q1 2022. This indicates that a significant portion of the company's capital structure is financed by debt, potentially leading to higher financial risk and dependence on debt financing.

3. Debt-to-equity ratio: The trend in the debt-to-equity ratio follows a similar pattern, rising from 0.56 in Q4 2023 to 0.88 in Q1 2022. This indicates that the company has been relying more heavily on debt relative to equity for its financing needs, which could signal higher leverage and financial risk.

4. Financial leverage ratio: The financial leverage ratio has also been increasing steadily, from 2.01 in Q4 2023 to 2.57 in Q1 2022. This suggests that the company is utilizing more debt in its capital structure, potentially amplifying risks associated with changes in interest rates and economic conditions.

In summary, TopBuild Corp's solvency ratios indicate a concerning trend of increasing reliance on debt financing over the analyzed period. This may raise questions about the company's ability to manage its debt levels effectively and maintain financial stability in the long term. Investors and stakeholders should closely monitor these solvency ratios to assess the company's financial health and risk exposure.

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	12.06	12.34	12.81	13.31	14.08	14.00	14.92	15.80	15.87	17.24	14.75	12.12	10.95	9.75	8.67	8.25	7.71	7.29	6.93	6.47

TopBuild Corp's interest coverage ratio has shown a consistent and healthy trend over the past eight quarters. The ratio has ranged from 11.78 in Q4 2023 to 15.78 in Q1 2022, indicating the company's strong ability to meet its interest obligations from its operating income.

The relatively high values of the interest coverage ratio reflect that TopBuild Corp's earnings before interest and taxes (EBIT) comfortably cover its interest expenses, providing a cushion for potential downturns in profitability or increases in interest rates. This signifies the company's financial stability and ability to manage its debt effectively.

Overall, the trend of increasing interest coverage ratios over the past eight quarters suggests that TopBuild Corp's financial position has been improving, with the company becoming more capable of servicing its debt obligations. This trend is a positive signal to investors and creditors regarding the company's financial health and ability to withstand economic challenges.