DXP Enterprises Inc (DXPE)

The solvency ratios of DXP Enterprises Inc have shown a general trend of increase over the past five years, indicating a higher level of leverage in the company's capital structure.

The debt-to-assets ratio has increased from 0.30 in 2019 to 0.44 in 2023, showing that the company's total debt relative to its total assets has increased over the years. This suggests that a larger portion of the company's assets is being financed by debt.

The debt-to-capital ratio has followed a similar pattern, increasing from 0.40 in 2019 to 0.58 in 2023. This ratio indicates the proportion of the company's capital that is financed by debt, and the increasing trend implies a higher reliance on debt financing.

The debt-to-equity ratio has also seen a steady increase, rising from 0.67 in 2019 to 1.37 in 2023. This ratio represents the amount of debt relative to shareholder equity, and the upward trend suggests that the company is taking on more debt compared to equity financing.

Lastly, the financial leverage ratio, which measures the company's total assets relative to its equity, has also shown a consistent increase from 2.23 in 2019 to 3.09 in 2023. This indicates that the company's assets are increasingly being funded by debt rather than equity.

Overall, the increasing trend in these solvency ratios for DXP Enterprises Inc suggests a higher level of financial leverage and potentially increased risk associated with the company's debt levels. Investors and creditors may want to monitor these ratios closely to assess the company's ability to meet its financial obligations in the long term.

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Coverage ratios

Interest coverage is a financial ratio that indicates a company's ability to pay interest expenses on its outstanding debt. A higher interest coverage ratio implies a stronger ability to cover interest payments from operating earnings.

Analyzing DXP Enterprises Inc's interest coverage ratios over the past five years shows some fluctuation. In 2023, the interest coverage ratio was 2.64, indicating that the company's operating earnings were 2.64 times higher than its interest expenses for that year. This ratio decreased compared to the previous year, where it was 3.26.

In 2021, the interest coverage ratio was 1.94, showing a slight improvement from the negative interest coverage ratio of -1.33 in 2020. A negative ratio, as seen in 2020, indicates that the company's operating earnings were not sufficient to cover its interest expenses, which raises concerns about its financial health and ability to service its debt.

However, in 2019, the interest coverage ratio was a healthier 3.47, signaling a strong ability to meet interest obligations from operating earnings.

Overall, the trend in DXP Enterprises Inc's interest coverage ratios fluctuates, with some years showing stronger coverage than others. It is important for investors and stakeholders to monitor these ratios closely as they indicate the company's ability to service its debt obligations and manage financial risks.