Cars.com Inc (CARS)
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 | 2.17 | 2.38 | 2.67 | 2.74 | 3.16 |
Based on the provided data for Cars.com Inc, the solvency ratios indicate a strong financial position with minimal debt obligations relative to its assets, capital, and equity.
1. Debt-to-assets ratio: The debt-to-assets ratio remained at 0.00 for the years 2020 to 2024, indicating that the company has not relied on debt financing to fund its operations and investments. A lower debt-to-assets ratio signifies lower financial risk and higher stability.
2. Debt-to-capital ratio: Similarly, the debt-to-capital ratio also stood at 0.00 consistently across the years, suggesting that the company's capital structure is primarily equity-based, with little to no dependence on debt to support its operations.
3. Debt-to-equity ratio: The debt-to-equity ratio remained at 0.00 for all the years under consideration, reflecting the absence of debt in the company's capital structure relative to its equity. This demonstrates a conservative approach to financing, prioritizing equity funding over debt.
4. Financial leverage ratio: The financial leverage ratio, which decreased from 3.16 in 2020 to 2.17 in 2024, indicates a declining trend in the company's reliance on debt to finance its assets. A lower financial leverage ratio implies reduced financial risk and potential for higher returns on equity for shareholders.
In summary, the solvency ratios for Cars.com Inc suggest a financially resilient and stable position, characterized by minimal debt levels and a conservative approach to financial leverage. This indicates a strong capacity to meet its financial obligations and withstand economic challenges in the future.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 0.92 | 1.56 | 1.90 | 0.20 | -24.03 |
Based on the interest coverage ratios provided for Cars.com Inc, we observe a significant decline from -24.03 as of December 31, 2020, to 0.20 as of December 31, 2021. This negative ratio in 2020 indicates that the company's earnings before interest and taxes (EBIT) were insufficient to cover its interest expenses. However, there has been improvement in subsequent years, with the interest coverage ratio reaching 1.90 as of December 31, 2022, and 1.56 as of December 31, 2023.
Despite these improvements, the interest coverage ratio decreased to 0.92 as of December 31, 2024, which suggests that Cars.com Inc might be facing challenges in generating enough operating income to cover its interest obligations. It is important for the company to closely monitor its interest coverage ratio to ensure that it maintains a healthy financial position and is able to meet its debt obligations comfortably.