Churchill Downs Incorporated (CHDN)

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 0.69 0.69 0.69 0.69 0.73 0.53 0.54 0.43 0.66 0.43 0.43 0.46 0.54 0.33 0.34 0.34 0.58 0.15 0.15 0.16
Debt-to-capital ratio 0.84 0.84 0.84 0.86 0.89 0.80 0.80 0.80 0.86 0.79 0.80 0.86 0.82 0.74 0.77 0.72 0.74 0.41 0.41 0.46
Debt-to-equity ratio 5.34 5.24 5.33 6.18 8.27 4.06 4.13 4.07 6.39 3.81 4.07 6.39 4.41 2.92 3.40 2.51 2.89 0.70 0.70 0.85
Financial leverage ratio 7.78 7.60 7.71 8.91 11.25 7.63 7.66 9.56 9.72 8.78 9.36 13.78 8.12 8.77 10.05 7.40 5.02 4.66 4.68 5.42

Solvency ratios provide insights into a company's ability to meet its long-term financial obligations. Based on the data provided for Churchill Downs, Inc., we observe the following trends in solvency ratios:

1. Debt-to-assets ratio:
- The debt-to-assets ratio remains relatively stable at 0.70 in the last four quarters, indicating that 70% of the company's assets are financed by debt.
- This ratio suggests that Churchill Downs has a moderate level of leverage and is able to cover its debt obligations with its asset base.

2. Debt-to-capital ratio:
- The debt-to-capital ratio also shows consistency around 0.84 to 0.86 in recent quarters.
- This ratio reflects that approximately 84% to 86% of the company's capital structure is in the form of debt, indicating a moderate reliance on debt financing.

3. Debt-to-equity ratio:
- The debt-to-equity ratio fluctuates but generally remains at elevated levels between 5.19 to 8.35 in the past quarters.
- The increasing trend implies a higher proportion of debt relative to equity in the company's capital structure, which may raise concerns about financial risk.

4. Financial leverage ratio:
- The financial leverage ratio shows fluctuations but is consistently high, ranging from 7.60 to 11.25 in recent periods.
- This high financial leverage ratio suggests that Churchill Downs relies significantly on debt to support its operations and investments, which could amplify both returns and risks for the company.

Overall, the solvency ratios indicate that Churchill Downs, Inc. maintains a reasonable level of debt relative to its assets and capital, but the increasing debt-to-equity ratio and consistently high financial leverage ratio may signal higher financial risk and sensitivity to economic fluctuations. Investors and analysts should closely monitor these solvency indicators to assess the company's long-term financial health and sustainability.

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 3.09 2.93 3.17 4.98 5.13 6.83 7.82 5.04 5.06 4.67 4.38 1.00 -0.09 -0.24 -0.70 2.85 3.74 4.14 5.59 6.38

The interest coverage ratio for Churchill Downs, Inc. has exhibited a general declining trend over the past eight quarters, starting at 5.41 in Q1 2022 and steadily decreasing to 2.76 in Q4 2023.

This decreasing trend may indicate that the company's ability to cover its interest expenses with its operating income has weakened over time. A lower interest coverage ratio could imply a higher risk for the company in meeting its interest obligations, as it suggests that a larger proportion of its operating income is being utilized to cover interest expenses.

It would be advisable for Churchill Downs, Inc. to closely monitor its interest coverage ratio and take appropriate actions to strengthen this key financial metric to ensure the company's financial stability and ability to meet its debt obligations in the future.