Caesars Entertainment Corporation (CZR)
Solvency ratios
| Dec 31, 2024 | Sep 30, 2024 | Mar 31, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.37 | 0.38 | 0.37 | 0.37 | 0.37 | 0.37 | 0.39 | 0.38 | 0.38 | 0.37 | 0.37 | 0.36 | 0.37 | 0.36 | 0.39 | 0.39 | 0.42 | 0.43 | 0.47 | 0.41 |
| Debt-to-capital ratio | 0.74 | 0.75 | 0.73 | 0.73 | 0.73 | 0.73 | 0.78 | 0.77 | 0.77 | 0.79 | 0.78 | 0.75 | 0.75 | 0.73 | 0.75 | 0.74 | 0.82 | 0.62 | 0.75 | 0.68 |
| Debt-to-equity ratio | 2.89 | 2.98 | 2.76 | 2.69 | 2.66 | 2.75 | 3.59 | 3.41 | 3.35 | 3.75 | 3.63 | 3.06 | 2.96 | 2.70 | 3.06 | 2.81 | 4.51 | 1.65 | 2.96 | 2.08 |
| Financial leverage ratio | 7.84 | 7.89 | 7.51 | 7.33 | 7.22 | 7.37 | 9.27 | 9.03 | 8.75 | 10.05 | 9.79 | 8.49 | 7.97 | 7.56 | 7.81 | 7.25 | 10.75 | 3.80 | 6.27 | 5.05 |
The solvency ratios for Caesars Entertainment Corporation indicate the company's ability to meet its long-term financial obligations.
1. Debt-to-Assets Ratio: This ratio measures the proportion of the company's assets financed by debt. Caesars' debt-to-assets ratio has ranged between 0.36 to 0.47 over the period under review, showing that, on average, 36% to 47% of the company's assets are funded by debt. A declining trend in this ratio from 2020 to 2023 suggests a lower reliance on debt to finance its assets, which can be a positive sign for solvency.
2. Debt-to-Capital Ratio: This ratio indicates how much of the company's capital structure is funded by debt. Caesars' debt-to-capital ratio has fluctuated between 0.62 to 0.82 during the period. The ratio increased in 2020 but stabilized around 0.73 to 0.79 from 2021 to 2024. A steady ratio shows a consistent mix of debt and equity in the capital structure.
3. Debt-to-Equity Ratio: This ratio compares the company's total debt to its shareholders' equity. Caesars' debt-to-equity ratio varied between 1.65 to 4.51, with the highest ratio recorded in September 2020. The ratio decreased thereafter, stabilizing around 2.66 to 3.75, indicating a moderate level of debt relative to equity.
4. Financial Leverage Ratio: This ratio assesses the company's total assets' financing provided by debt. Caesars' financial leverage ratio ranged from 3.80 to 10.75, with the highest leverage observed in September 2020. The ratio gradually decreased from 2021 to 2024, indicating a reduction in the reliance on debt to finance the company's assets.
In conclusion, Caesars Entertainment Corporation has maintained a relatively stable solvency position over the years, with some fluctuations in the ratios observed. The overall trend indicates a cautious approach to debt management and an improving solvency position, as evidenced by the decreasing trend in certain ratios over time. Investors and analysts may view these solvency metrics as a key factor in assessing the company's long-term financial health and risk profile.
Coverage ratios
| Dec 31, 2024 | Sep 30, 2024 | Mar 31, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 0.64 | 1.30 | 0.97 | 0.96 | 0.92 | 0.90 | 0.86 | 0.59 | 0.41 | 0.24 | 0.31 | 0.44 | 0.47 | 0.24 | -0.11 | -0.34 | -0.66 | -0.09 | 0.51 | 1.44 |
The interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt, with a higher ratio indicating a stronger ability to do so. By analyzing the interest coverage ratio of Caesars Entertainment Corporation over the specified time periods, we can observe fluctuations in the company's ability to cover its interest expenses.
From December 31, 2019, to March 31, 2020, the interest coverage ratio decreased significantly from 1.44 to 0.51, indicating a potential struggle to cover interest obligations. The ratio further deteriorated in subsequent periods, reaching negative values by June 30, 2020, signifying that Caesars Entertainment Corporation was not generating enough earnings to cover its interest expenses during this time.
However, the company showed signs of improvement starting from the end of 2020, with the interest coverage ratio gradually increasing. By March 31, 2024, the ratio reached 0.97, indicating a better ability to cover interest payments. The trend continued positively, with the ratio improving to 1.30 by September 30, 2024, suggesting that Caesars Entertainment Corporation's earnings were increasingly sufficient to meet its interest obligations.
Despite the improvements in the latter periods, it is important to note that the interest coverage ratio remained below 1 for several quarters, indicating that the company's earnings were not consistently covering its interest expenses. This highlights a potential risk associated with Caesars Entertainment Corporation's debt repayment capabilities and suggests the need for continued monitoring of the company's financial performance.