Dream Finders Homes Inc (DFH)
Solvency ratios
| Sep 30, 2024 | Jun 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 | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 2.98 | 2.85 | 2.80 | 2.77 | 2.42 | 2.49 | 2.71 | 2.96 | 3.19 | 3.26 | 3.34 | 3.40 | 2.47 | 2.83 | 2.89 |
Dream Finders Homes Inc has consistently maintained a debt-free status, as indicated by the consistently low debt-to-assets, debt-to-capital, and debt-to-equity ratios of 0.00 across all periods. This signifies that the company has not relied on debt to finance its operations and investments, which can be viewed positively in terms of solvency and financial risk.
On the other hand, the financial leverage ratio has shown fluctuations over the periods, ranging from 2.42 to 3.40. The ratio hit its lowest point at 2.42 in the third quarter of 2023 and peaked at 3.40 by the end of 2021. This ratio measures the extent of a company's financial leverage and indicates the proportion of a company's assets that are financed by debt. The increasing trend in the financial leverage ratio suggests that the company's reliance on debt has been on the rise over the periods, indicating potential higher financial risk and leverage. However, it is essential to note that the absolute values of the financial leverage ratio are still within a range that could be considered manageable.
Overall, the consistently low debt ratios reflect Dream Finders Homes Inc's strong solvency position, while the fluctuating financial leverage ratio signals a slight increase in financial risk due to a higher reliance on debt financing. Balancing debt levels to maintain a healthy financial structure while managing risks associated with leverage will be crucial for the company's long-term financial health and stability.
Coverage ratios
| Sep 30, 2024 | Jun 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 4.63 | 1.15 | 1.12 | 1.12 | 3.06 | 153.83 | 305.35 | 10,756.38 | 9,611.00 | 6,029.60 | 4,378.79 | 222.11 |
The interest coverage ratio for Dream Finders Homes Inc varies significantly over the periods presented. It is calculated by dividing the Earnings Before Interest and Taxes (EBIT) by the interest expense. A higher interest coverage ratio indicates the company's ability to easily cover its interest obligations with operating earnings.
Looking at the data, we observe a considerable fluctuation in the interest coverage ratio. In the recent period, the ratio was 4.63, which indicates that the company's operating earnings were sufficient to cover its interest expenses approximately 4.63 times. This suggests a relatively healthy financial position in terms of meeting interest payments.
However, in prior periods, the interest coverage ratio was notably lower and even negative in some instances like June 2023 and March 2023. A negative interest coverage ratio implies that the company's operating earnings were insufficient to cover its interest expenses, which can be a cause for concern as it may indicate financial distress.
The substantial increase in the interest coverage ratio in December 2022 and March 2023 to very high levels like 10,756.38 and 305.35 respectively, may be due to extraordinary or irregular fluctuations in EBIT or interest expenses during these periods. Such extreme values can distort the interpretation of the ratio and may not reflect the company's ongoing financial health accurately.
In conclusion, while the most recent interest coverage ratio of 4.63 shows an improvement in the company's ability to cover interest expenses from previous periods, the significant fluctuations in the ratio suggest a need for further examination of the company's financial performance and stability over time.