Quest Diagnostics Incorporated (DGX)

Quest Diagnostics, Inc.'s solvency ratios demonstrate a relatively stable and healthy financial position over the past five years. The debt-to-assets ratio has slightly increased from 0.30 in 2021 to 0.35 in 2023, indicating that 35% of the company's assets are financed by debt. Despite this uptick, the ratio remains at a reasonable level, suggesting a conservative approach to leveraging.

Similarly, the debt-to-capital and debt-to-equity ratios have shown marginal increases over the period, reflecting a moderate proportion of debt in the company's capital structure. As of 2023, these ratios stand at 0.43 and 0.77, respectively, highlighting a stable mix of debt and equity financing.

The financial leverage ratio, measuring total assets relative to equity, has also exhibited a consistent trend, hovering around 2.20 for the past five years. This signifies that the company operates with a moderate level of financial leverage, maintaining a balance between debt and equity funding to support its operations and growth initiatives.

Overall, Quest Diagnostics, Inc. maintains a sound solvency position, with manageable levels of debt relative to its assets and capital. These ratios indicate a prudent financial strategy and a solid foundation for long-term sustainability and growth.

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Coverage ratios

Quest Diagnostics, Inc.'s interest coverage ratio has shown some fluctuations over the past five years. The interest coverage ratio measures a company's ability to meet its interest obligations with its earnings before interest and taxes (EBIT). A higher interest coverage ratio indicates a greater ability to cover interest expenses.

In 2023, the interest coverage ratio was 8.74, a decrease from the previous year's ratio of 10.75. Despite the slight decrease, the company still demonstrated a solid ability to cover its interest payments. The 2023 ratio of 8.74 indicates that Quest Diagnostics, Inc. generated earnings 8.74 times its interest expenses for the year.

Looking back at the trend over the past five years, the interest coverage ratio has been relatively healthy and consistently above industry benchmarks. The highest interest coverage ratio was recorded in 2021 at 16.28, indicating a strong ability to cover interest payments. The lowest ratio was in 2019 at 7.36, which is still considered acceptable.

Overall, the trend in Quest Diagnostics, Inc.'s interest coverage ratio shows that the company has generally been able to comfortably meet its interest obligations with its earnings over the past five years. However, analysts may want to monitor any further fluctuations in the ratio to ensure the company maintains a healthy financial position.