Builders FirstSource Inc (BLDR)
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 | 2.46 | 2.22 | 2.14 | 2.23 | 3.62 |
Builders FirstSource Inc has consistently maintained a strong solvency position over the period under consideration, as indicated by its low debt-to-assets, debt-to-capital, and debt-to-equity ratios, all of which remain at 0.00 throughout the years 2020 to 2024. This suggests that the company has relatively minimal debt in relation to its total assets, capital structure, and equity, reflecting a conservative approach to leverage.
Additionally, the financial leverage ratio, which provides insight into the extent of financial risk carried by the company, has shown a decreasing trend from 3.62 in 2020 to 2.46 in 2024. This reduction indicates an improvement in the company's ability to meet its financial obligations through a more efficient capital structure, with a decreasing reliance on debt financing.
Overall, the stable and decreasing trend in these solvency ratios indicates that Builders FirstSource Inc is effectively managing its debt levels and maintaining a healthy financial position, which bodes well for its long-term financial stability and ability to weather potential economic downturns.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 7.68 | 11.33 | 19.01 | 17.57 | 4.01 |
Builders FirstSource Inc's interest coverage ratio has shown a positive trend over the past few years. In December 31, 2020, the interest coverage ratio was 4.01, indicating that the company's operating income was able to cover its interest expenses approximately four times.
By December 31, 2021, the interest coverage ratio improved significantly to 17.57, suggesting a substantial increase in the company's ability to meet its interest obligations with its operating income. This continued to improve in December 31, 2022, with an interest coverage ratio of 19.01, indicating a further strengthening of the company's financial position and ability to comfortably cover its interest expenses.
However, in December 31, 2023, there was a slight decline in the interest coverage ratio to 11.33, which although lower than the previous year, still demonstrates a healthy level of coverage. By December 31, 2024, the interest coverage ratio decreased further to 7.68, evidencing a decrease in the company's ability to cover its interest expenses with its operating income compared to the previous year.
Overall, the trend in Builders FirstSource Inc's interest coverage ratio reflects a generally positive financial performance and improved ability to meet its interest obligations. However, the slight fluctuations in recent years indicate the importance of monitoring the company's financial health and efficiency in managing its debt and interest payments.