Clean Harbors Inc (CLH)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.36 | 0.39 | 0.45 | 0.38 | 0.38 |
| Debt-to-capital ratio | 0.50 | 0.56 | 0.62 | 0.54 | 0.55 |
| Debt-to-equity ratio | 1.02 | 1.26 | 1.66 | 1.16 | 1.22 |
| Financial leverage ratio | 2.84 | 3.19 | 3.73 | 3.08 | 3.24 |
Clean Harbors, Inc. has shown a declining trend in its solvency ratios over the past five years. The debt-to-assets ratio has decreased from 0.45 in 2021 to 0.36 in 2023, indicating that the company's level of debt in relation to its total assets has improved. Similarly, the debt-to-capital ratio has also declined from 0.63 in 2021 to 0.51 in 2023, suggesting that the company is relying less on debt to finance its operations.
However, the debt-to-equity ratio shows a fluctuating pattern, reaching its peak at 1.67 in 2021 before slightly decreasing to 1.02 in 2023. This ratio indicates that Clean Harbors' level of debt in relation to its equity has been volatile over the years.
The financial leverage ratio, which measures the company's use of debt to finance its assets, has also decreased from 3.73 in 2021 to 2.84 in 2023, indicating a positive trend in reducing financial risk through lower leverage.
Overall, Clean Harbors, Inc. has managed to improve its solvency position over the years, as evidenced by the decreasing trend in its debt ratios. However, the fluctuating debt-to-equity ratio suggests that the company may still be working to achieve a more stable capital structure.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 57.50 | 99.01 | 136.75 | 165.03 | 162.16 |
The interest coverage ratio for Clean Harbors, Inc. has shown a generally increasing trend from 2.92 in 2019 to 5.64 in 2023. This indicates that the company's ability to cover its interest expenses with its earnings has been improving over the years, which is a positive sign of financial health and stability.
A ratio above 1.0 indicates that the company is generating enough operating income to cover its interest payments. Clean Harbors, Inc. consistently maintaining interest coverage ratios above 5.0 demonstrates a strong capacity to meet its interest obligations comfortably.
The upward trend in interest coverage over the years reflects the company's effective management of its debt and growing profitability. It suggests that Clean Harbors, Inc. has been successful in optimizing its capital structure and is less vulnerable to financial risks associated with high debt levels.
Overall, Clean Harbors, Inc.'s interest coverage ratio indicates a solid financial position and ability to manage its debt obligations effectively.