DR Horton Inc (DHI)

DR Horton Inc's solvency ratios demonstrate a consistent and stable financial position over the past five years. The Debt-to-assets ratio has remained relatively low at around 0.10, indicating that the company's total debt is only a small portion of its assets. This suggests that the company has a strong asset base to cover its debt obligations.

Similarly, the Debt-to-capital ratio has also remained constant at approximately 0.12, indicating that the company's debt is only a small percentage of its total capital. This implies that DR Horton Inc relies more on its equity and retained earnings to finance its operations rather than taking on excessive debt.

The Debt-to-equity ratio has remained steady at around 0.14 to 0.15, showing a moderate level of financial risk as the company's debt is around 14% to 15% of its equity. This indicates a balanced capital structure with a healthy mix of debt and equity financing.

The Financial leverage ratio has decreased slightly from 1.61 in 2021 to 1.43 in 2024. This suggests that the company is relying less on debt to fund its operations and is becoming less leveraged over time.

Overall, DR Horton Inc's solvency ratios reflect a robust financial position with a conservative approach to debt management, which is positive for the company's long-term stability and ability to meet its financial obligations.

---

Coverage ratios

The interest coverage ratio measures the ability of DR Horton Inc to meet its interest payments on outstanding debt obligations using its operating income. A higher interest coverage ratio is generally indicative of a company's strong financial health and ability to service its debt.

DR Horton Inc's interest coverage ratio has shown consistent strength over the past five years, with values ranging from 20.41 to 47.72. This indicates that the company's operating income is significantly higher than its interest expenses in each of the years, providing a comfortable buffer to meet its debt service obligations.

The high and relatively stable interest coverage ratios for DR Horton Inc suggest that the company has a strong ability to generate earnings to cover its interest costs. Investors and creditors often view a high interest coverage ratio positively as it provides confidence in the company's ability to manage and repay its debt obligations.

Overall, the consistent and robust interest coverage ratios for DR Horton Inc reflect a sound financial position and signify a lower risk of default on its debt obligations.