DT Midstream Inc (DTM)

Solvency ratios provide insights into a company's ability to meet its long-term financial obligations. Looking at DT Midstream Inc's solvency ratios over the past four years, we observe the following trends:

1. Debt-to-assets ratio: DT Midstream Inc has maintained a relatively stable debt-to-assets ratio between 0.36 and 0.38 over the past four years. This indicates that, on average, around 36% to 38% of the company's total assets are financed through debt.

2. Debt-to-capital ratio: The trend in the debt-to-capital ratio shows consistency, ranging from 0.44 to 0.46. This implies that approximately 44% to 46% of the company's capital structure is composed of debt, with the remainder coming from equity.

3. Debt-to-equity ratio: DT Midstream Inc has managed to keep its debt-to-equity ratio within a narrow range of 0.78 to 0.85 over the period under review. This implies that the company relies more on debt financing compared to equity, with debt constituting around 78% to 85% of the total equity.

4. Financial leverage ratio: The financial leverage ratio, which measures the company's reliance on debt to finance its operations, has shown a slight increase over the years, from 2.05 in 2020 to 2.17 in 2023. This indicates that the company is increasingly using debt to fund its activities relative to equity.

Overall, the solvency ratios of DT Midstream Inc demonstrate a stable and consistent financing structure over the past four years, with a moderate level of debt utilization to support its operations and investments. Further analysis of the company's cash flow and interest coverage ratios would provide a more comprehensive assessment of its overall solvency and financial health.

---

Coverage ratios

DT Midstream Inc's interest coverage ratio has been gradually decreasing over the past four years, indicating a slight weakening in the company's ability to cover its interest expenses with its operating income.

In 2020, the interest coverage ratio stood at 5.00, showing that the company's operating income was sufficient to cover its interest expenses 5 times over. This healthy ratio decreased to 5.05 in 2021, still reflecting a strong ability to meet interest obligations.

However, a more noticeable decline was seen in 2022 and 2023, with interest coverage ratios of 4.51 and 4.32, respectively. While the company's operating income continues to exceed its interest expenses by a significant margin, the decreasing trend may indicate a potential strain on the company's ability to cover interest payments in the future.

Overall, DT Midstream Inc's interest coverage remains at a satisfactory level, but monitoring this ratio closely in the coming periods will be important to ensure the company's financial health and stability.