Everus Construction Group Inc (ECG)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | — |
| Debt-to-capital ratio | 0.00 | 0.00 | — |
| Debt-to-equity ratio | 0.00 | 0.00 | — |
| Financial leverage ratio | 2.47 | 2.97 | — |
The solvency ratios of Everus Construction Group Inc indicate a strong financial position over the past three years. The debt-to-assets, debt-to-capital, and debt-to-equity ratios were all zero in 2023 and 2022, suggesting that the company has no debt relative to its assets, capital, and equity during these periods. This indicates a conservative financial strategy with little reliance on borrowing to fund operations or investments.
However, the financial leverage ratio has decreased from 2.97 in 2022 to 2.47 in 2023. This ratio measures the proportion of a company's total assets that are financed by debt. The decrease in the financial leverage ratio indicates a lower level of debt compared to total assets in 2023, which might point towards a reduced risk of financial distress and a stronger solvency position compared to the previous year.
Overall, based on the solvency ratios provided, Everus Construction Group Inc appears to have a solid financial foundation with minimal debt relative to its assets and capital, indicating a low risk of default and strong solvency position.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|
| Interest coverage | 6.61 | 26.13 | 41.66 |
The interest coverage ratio for Everus Construction Group Inc has shown a notable decrease over the past three years. In particular, the interest coverage ratio decreased from 41.66 in 2021 to 26.13 in 2022 and further declined to 6.61 in 2023. This significant downward trend indicates that the company's ability to cover its interest expenses with its operating income has weakened over time.
A high interest coverage ratio is generally preferred as it signifies that the company is comfortably able to meet its interest obligations. Conversely, a decreasing interest coverage ratio may raise concerns about the company's financial health and its ability to handle debt repayment. It suggests that a larger portion of the operating income is now being consumed by interest payments, which could potentially strain the company's cash flow and overall financial stability.
As a financial analyst, further investigation into Everus Construction Group Inc's financial performance, debt levels, and profitability trends would be necessary to assess the implications of the declining interest coverage ratio and recommend any necessary strategic actions to improve the company's financial health.