Cars.com Inc (CARS)

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	0.39	0.39	0.40	0.44	0.45	0.46	0.47	0.47	0.45	0.47	0.49	0.51	0.54	0.52	0.57	0.61	0.30	0.31	0.25	0.25
Debt-to-capital ratio	0.48	0.47	0.48	0.53	0.54	0.56	0.56	0.56	0.53	0.54	0.57	0.58	0.61	0.63	0.65	0.69	0.35	0.36	0.29	0.29
Debt-to-equity ratio	0.93	0.89	0.91	1.14	1.19	1.28	1.27	1.26	1.15	1.19	1.30	1.40	1.56	1.73	1.85	2.19	0.54	0.55	0.41	0.41
Financial leverage ratio	2.38	2.28	2.27	2.60	2.67	2.79	2.69	2.70	2.53	2.53	2.65	2.77	2.92	3.31	3.28	3.61	1.78	1.80	1.61	1.62

The solvency ratios of Cars.com provide insights into the company's ability to meet its long-term financial obligations. These ratios analyze the extent to which the company relies on debt to finance its operations and the associated risks.

1. Debt-to-assets ratio:
- The debt-to-assets ratio indicates the percentage of the company's assets financed by debt. Over the past eight quarters, the ratio has generally remained relatively stable, ranging from 0.41 to 0.48.
- The decrease in the ratio from Q1 2023 to Q4 2023 suggests that the company may have reduced its reliance on debt to finance its assets, which is a positive sign for solvency.

2. Debt-to-capital ratio:
- The debt-to-capital ratio measures the proportion of the company's capital structure funded by debt. Cars.com's ratio has fluctuated between 0.48 and 0.57 over the past eight quarters.
- The decrease in the ratio from Q4 2022 to Q3 2023 implies a reduction in the debt portion of the company's capital structure, which may indicate improved financial health.

3. Debt-to-equity ratio:
- The debt-to-equity ratio reflects the relationship between the company's debt and equity. Cars.com's ratio has varied from 0.93 to 1.32 in the past eight quarters.
- The declining trend from Q4 2022 to Q3 2023 indicates that the company has reduced its reliance on debt compared to equity, which could improve its solvency position.

4. Financial leverage ratio:
- The financial leverage ratio shows the extent to which the company uses debt to finance its operations. Over the past eight quarters, the ratio has ranged between 2.27 and 2.79.
- The decrease in the ratio from Q4 2022 to Q3 2023 suggests that Cars.com has reduced its financial leverage, potentially reducing the risks associated with high debt levels.

Overall, based on the solvency ratios analysis, Cars.com appears to be managing its debt levels effectively, with some signs of improvement in reducing debt reliance and financial risks over the quarters analyzed. However, continuous monitoring of these ratios is key to ensuring the company's long-term financial stability and solvency.

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	17.79	19.04	20.47	21.13	20.41	15.30	12.74	12.79	14.39	11.57	12.47	6.37	-173.71	-296.15	-589.00	-740.96	-283.57	-329.65	37.93	55.88

From the data provided, we can observe the trend in Cars.com's interest coverage ratio over the past eight quarters. The interest coverage ratio indicates the company's ability to meet its interest obligations with its earnings before interest and taxes (EBIT).

Cars.com's interest coverage ratio has been fluctuating over the quarters, ranging from a low of 1.12 in Q1 2022 to a high of 1.98 in Q1 2023. A ratio below 1 suggests that the company may have difficulty meeting its interest payments with its earnings.

The gradual improvement in the interest coverage ratio from Q1 2022 to Q1 2023 may indicate a positive trend in the company's ability to cover its interest expenses. However, the ratios are relatively low, and it would be prudent for the company to continue monitoring and improving its financial performance to ensure its ability to meet its debt obligations comfortably.

Overall, Cars.com's interest coverage ratio shows some variability, and it would be essential for the company to continue focusing on strengthening its financial position to maintain a healthy level of interest coverage.