Clean Harbors Inc (CLH)

The solvency ratios of Clean Harbors Inc provide insight into the company's ability to meet its long-term financial obligations.

1. Debt-to-assets ratio: This ratio measures the proportion of a company's assets funded by debt. Clean Harbors Inc's debt-to-assets ratio has fluctuated over the years, ranging from 0.36 to 0.45. A lower ratio indicates a lower reliance on debt to finance assets, which may lower financial risk.

2. Debt-to-capital ratio: This ratio indicates the proportion of a company's capital that is financed by debt. Clean Harbors Inc's debt-to-capital ratio has shown some variability, ranging from 0.50 to 0.62. A higher ratio suggests a greater level of financial leverage, which can increase risk but also potentially enhance returns during favorable economic conditions.

3. Debt-to-equity ratio: This ratio shows the extent to which a company is financed by debt versus equity. Clean Harbors Inc's debt-to-equity ratio has fluctuated between 1.02 and 1.66. A higher ratio indicates a higher debt component in the capital structure, which may indicate higher financial risk but also potential for higher returns.

4. Financial leverage ratio: This ratio measures the extent to which a company uses debt in its capital structure. Clean Harbors Inc's financial leverage ratio has ranged from 2.84 to 3.73. A higher ratio indicates a higher level of financial risk due to increased reliance on debt financing.

Overall, the trend in these solvency ratios for Clean Harbors Inc indicates fluctuations in the company's reliance on debt to finance its operations and investments. It is essential for stakeholders to assess these ratios in conjunction with other financial metrics to gain a comprehensive understanding of the company's solvency position.

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Coverage ratios

Clean Harbors Inc's interest coverage has shown a gradual decline over the years, indicating a potential increase in the company's risk of financial distress or inability to meet interest obligations from its operating income. As of December 31, 2020, the interest coverage ratio was a healthy 165.03, indicating the company had sufficient earnings to cover its interest payments comfortably. However, this ratio decreased to 136.75 by December 31, 2021, and continued to decline to 99.01 by December 31, 2022. This downward trend suggests a reduced ability to cover interest expenses from operating income.

Further, the interest coverage ratio dropped significantly to 57.50 by December 31, 2023, highlighting a concerning decline in the company's ability to service its debt obligations. Although there was a slight improvement to 59.84 by December 31, 2024, the ratio remains lower than previous years, indicating ongoing challenges in meeting interest payments.

Overall, the declining trend in Clean Harbors Inc's interest coverage ratio raises red flags regarding the company's financial health and ability to manage its debt obligations effectively. Investors and stakeholders should closely monitor this ratio to assess the company's financial stability and risk profile.