PC Connection Inc (CNXN)
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 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 1.43 | 1.41 | 1.44 | 1.59 | 1.60 |
Based on the provided data, PC Connection Inc demonstrates strong solvency ratios with consistently low levels of debt relative to its assets, capital, and equity. The debt-to-assets, debt-to-capital, and debt-to-equity ratios are all reported as 0.00 over the five-year period from 2020 to 2024. This indicates that the company has no debt obligations in comparison to its total assets, capital, and equity, reflecting a conservative financing structure.
Furthermore, the financial leverage ratio, which measures the extent to which a company is using debt to finance its operations, shows a declining trend over the same period. Starting at 1.60 in 2020, the financial leverage ratio decreases to 1.43 in 2024. This suggests that PC Connection Inc is becoming less reliant on debt to fund its operations and may be improving its financial stability over time.
Overall, the consistent zero debt ratios and decreasing financial leverage ratio indicate that PC Connection Inc has a strong financial position and a relatively low risk of financial distress due to debt obligations. This is a positive sign for investors and creditors as it indicates a stable and sound solvency position for the company.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | — | — | 111.31 | 19,303.40 | 685.07 |
The interest coverage ratio measures a company's ability to meet its interest payments using its operating income. Looking at the data provided for PC Connection Inc, we observe significant fluctuations in the interest coverage ratio over the years.
In December 31, 2020, the interest coverage ratio was reported at 685.07, indicating a robust ability to cover interest expenses with operating income. This suggests a healthy financial position with strong earnings relative to interest obligations.
The ratio saw a notable increase to 19,303.40 by December 31, 2021, showcasing a substantial improvement in the company's ability to meet its interest payments. This significant surge may indicate either a surge in operating income or a decrease in interest expenses, both of which are positive signs for the company's financial health.
However, the interest coverage ratio dropped to 111.31 by December 31, 2022, indicating a decrease in the company's ability to cover interest expenses compared to the previous year. While still above 1, which is generally considered the minimum acceptable level, it suggests a potential weakening of the company's financial position.
Notably, there is no data available for the years 2023 and 2024, which could indicate that the company did not incur any interest expenses or that the information is not disclosed.
In conclusion, the fluctuations in PC Connection Inc's interest coverage ratio reflect varying levels of ability to meet interest payments over the years. It is essential for investors and stakeholders to monitor these trends closely to assess the company's financial stability and ability to manage its debt obligations effectively.