Now Inc (DNOW)
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 | 1.44 | 1.44 | 1.57 | 1.55 | 1.44 |
Now Inc has consistently maintained a strong solvency position, as indicated by its low debt-to-assets ratio, debt-to-capital ratio, and debt-to-equity ratio, all of which have remained at 0.00 from 2020 to 2024. This suggests that the company has minimal reliance on debt financing in relation to its assets, capital, and shareholders' equity.
The financial leverage ratio, which measures the proportion of the company's assets that are financed by debt, has shown slight fluctuations over the years, ranging from 1.44 to 1.57. Overall, the financial leverage ratio seems to be relatively stable, with the company maintaining a conservative level of leverage.
In conclusion, based on the solvency ratios provided, Now Inc appears to have a solid financial position with low debt levels and a conservative approach to leverage, which bodes well for the company's long-term financial stability and ability to meet its financial obligations.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | — | — | 21.57 | 1.42 | -0.17 |
The interest coverage ratio is a key metric used to assess a company's ability to meet its interest obligations on outstanding debt. It is calculated by dividing earnings before interest and taxes (EBIT) by the interest expense.
Looking at Now Inc's interest coverage over the years, we can see a fluctuating trend. As of December 31, 2020, the interest coverage ratio was negative at -0.17, indicating that the company's EBIT was not sufficient to cover its interest expenses for that period.
However, there was an improvement in the interest coverage ratio by December 31, 2021, reaching 1.42. While still relatively low, this suggests that the company's earnings were starting to better cover its interest obligations.
By December 31, 2022, Now Inc saw a significant boost in its interest coverage ratio to 21.57, indicating a strong improvement in its ability to cover interest expenses from operating earnings.
Unfortunately, data is unavailable for the subsequent years, December 31, 2023, and December 31, 2024. It would be useful to assess the reasons behind the fluctuations in the interest coverage ratio, like changes in EBIT, interest rates, or debt levels, to gain a deeper understanding of Now Inc's financial health and debt servicing capabilities.