Clean Harbors Inc (CLH)
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 | 0.36 | 0.37 | 0.38 | 0.40 | 0.39 | 0.41 | 0.42 | 0.44 | 0.45 | 0.36 | 0.36 | 0.37 | 0.38 | 0.38 | 0.40 | 0.41 | 0.38 | 0.39 | 0.40 | 0.40 |
| Debt-to-capital ratio | 0.50 | 0.51 | 0.52 | 0.55 | 0.56 | 0.58 | 0.59 | 0.61 | 0.62 | 0.51 | 0.52 | 0.53 | 0.54 | 0.54 | 0.56 | 0.59 | 0.55 | 0.56 | 0.56 | 0.57 |
| Debt-to-equity ratio | 1.02 | 1.05 | 1.09 | 1.22 | 1.26 | 1.36 | 1.46 | 1.58 | 1.66 | 1.06 | 1.10 | 1.15 | 1.16 | 1.19 | 1.30 | 1.41 | 1.22 | 1.26 | 1.29 | 1.33 |
| Financial leverage ratio | 2.84 | 2.86 | 2.89 | 3.07 | 3.19 | 3.30 | 3.45 | 3.59 | 3.73 | 2.98 | 3.03 | 3.08 | 3.08 | 3.15 | 3.25 | 3.43 | 3.24 | 3.25 | 3.27 | 3.31 |
Solvency ratios provide insights into a company's ability to meet its long-term financial obligations using its assets and capital structure. Looking at Clean Harbors, Inc.'s solvency ratios over the past eight quarters, we observe a consistent trend of improvement in some ratios while others show slight fluctuations.
The debt-to-assets ratio has been gradually decreasing from 0.40 in Q4 2022 to 0.36 in Q4 2023, indicating that Clean Harbors has been reducing its reliance on debt to finance its assets over time.
Similarly, the debt-to-capital ratio has also shown a declining trend, decreasing from 0.56 in Q4 2022 to 0.51 in Q4 2023. This implies that the proportion of debt in Clean Harbors' capital structure has been decreasing, suggesting a strengthening financial position.
On the other hand, the debt-to-equity ratio and financial leverage ratio have shown more fluctuation. The debt-to-equity ratio, while fluctuating, has increased overall from 1.26 in Q4 2022 to 1.02 in Q4 2023, indicating a higher level of debt relative to equity in the company's capital structure.
The financial leverage ratio has also demonstrated some variability, ranging from 3.19 in Q4 2022 to 2.84 in Q4 2023. This ratio shows the extent to which Clean Harbors is using debt to finance its assets and indicates a decline in financial leverage over the quarters under review.
Overall, Clean Harbors, Inc. appears to be managing its solvency well, with a decreasing trend in debt reliance in its capital structure as reflected in the declining debt-to-assets and debt-to-capital ratios. However, the increasing debt-to-equity ratio suggests a higher level of financial risk associated with the company's capital structure, which investors and stakeholders should monitor closely.
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 | 58.05 | 68.02 | 81.82 | 92.72 | 99.01 | 22.49 | 11.04 | 6.21 | 4.36 | 4.40 | 4.11 | 3.41 | 3.28 | 4.14 | 5.94 | 11.97 | 209.74 | 10.23 | 9.71 | 9.43 |
Analyzing Clean Harbors, Inc.'s interest coverage ratio over the past eight quarters reveals a consistent trend of healthy interest coverage levels. The interest coverage ratio measures the company's ability to meet its interest payments on outstanding debt with its earnings before interest and taxes (EBIT).
Clean Harbors has demonstrated strong interest coverage ratios ranging from 4.53 to 6.47 over the observed period. This indicates that the company's EBIT has been sufficient to cover its interest expenses comfortably, with ratios consistently above 1, implying a low risk of default on interest payments.
The increasing trend in interest coverage ratios from Q1 2022 to Q1 2023 reflects improving financial health and the company's ability to generate earnings at a faster pace than its interest expenses are accumulating. This positive trend suggests that Clean Harbors is effectively managing its debt obligations and operating profitably.
Overall, the consistent and relatively high interest coverage ratios demonstrate Clean Harbors' financial stability and ability to service its debt obligations efficiently. Investors and creditors can view this trend favorably, indicating a lower risk of financial distress related to interest payments.