Cogent Communications Group Inc (CCOI)
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 | — | — | — |
| Debt-to-equity ratio | 0.00 | 0.00 | — | — | — |
| Financial leverage ratio | 14.24 | 5.27 | — | — | — |
Based on the provided data, Cogent Communications Group Inc has shown strong solvency ratios over the years. The Debt-to-assets ratio has been consistently at 0.00 from 2020 to 2024, indicating that the company has no debt relative to its total assets during these years.
The Debt-to-capital and Debt-to-equity ratios were not available (indicated as "—") for 2020 and 2021. However, from 2022 to 2024, both ratios were at 0.00, suggesting that the company has not relied on debt significantly to finance its operations, and its capital and equity structure show little to no dependence on borrowed funds.
The Financial leverage ratio, which measures the degree to which a company uses debt to finance its operations, was not available for 2020 and 2021 as well. However, it increased substantially from 5.27 in 2023 to 14.24 in 2024. This indicates that in 2024, Cogent Communications Group Inc significantly increased its reliance on debt to fund its operations, potentially increasing its financial risk and leverage.
Overall, the data suggests that Cogent Communications Group Inc has maintained a strong solvency position with minimal debt obligations relative to its assets, capital, and equity. However, the substantial increase in the Financial leverage ratio in 2024 may warrant further investigation into the company's debt management and financial strategies.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | -4.99 | 12.42 | 1.72 | 1.67 | 1.71 |
Interest coverage ratio is a financial metric used to evaluate a company's ability to pay its interest expenses on outstanding debt. It is calculated by dividing a company's earnings before interest and taxes (EBIT) by its interest expenses. A higher interest coverage ratio indicates that the company is better positioned to meet its interest obligations.
Analyzing the interest coverage of Cogent Communications Group Inc based on the provided data, we can observe the following trends:
1. December 31, 2020: The interest coverage ratio was 1.71, indicating that the company's earnings were just sufficient to cover its interest expenses.
2. December 31, 2021: The interest coverage ratio decreased slightly to 1.67, which may suggest a marginal decline in the company's ability to cover its interest costs.
3. December 31, 2022: The interest coverage ratio improved to 1.72, showing a slight recovery in the company's ability to cover its interest payments compared to the previous year.
4. December 31, 2023: There was a significant increase in the interest coverage ratio to 12.42, which is a positive sign indicating a substantial improvement in the company's ability to meet its interest obligations. This drastic improvement could be due to increased profitability or a decrease in interest expenses.
5. December 31, 2024: The interest coverage ratio turned negative at -4.99, which raises concerns as it implies that the company's earnings were insufficient to cover its interest expenses. A negative interest coverage ratio is a red flag for investors and creditors as it indicates a potential risk of defaulting on debt payments.
In conclusion, Cogent Communications Group Inc's interest coverage has shown fluctuations over the years, with both positive and concerning trends. While the company experienced a significant improvement in 2023, the negative interest coverage ratio in 2024 should be carefully investigated to understand the factors contributing to this sharp decline. Investors and stakeholders should closely monitor the company's financial performance and debt management strategies to assess its long-term sustainability.