Encompass Health Corp (EHC)
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 | 3.16 | 3.70 | 4.30 | 3.59 | 4.06 |
Encompass Health Corp has consistently maintained a strong solvency position as evidenced by its low debt-to-assets, debt-to-capital, and debt-to-equity ratios, all of which were reported as 0.00 over the five-year period from December 31, 2020, to December 31, 2024. This indicates that the company has minimal debt relative to its assets, capital, and equity.
Furthermore, the financial leverage ratio, which provides insight into the company's ability to meet its financial obligations, decreased from 4.06 in 2020 to 3.16 in 2024. This decreasing trend suggests that Encompass Health Corp has been effectively managing its financial leverage and gradually reducing its reliance on debt financing over the years.
Overall, the solvency ratios indicate that Encompass Health Corp has a strong financial position with low debt levels and effective management of its financial leverage, which bodes well for its long-term financial stability and ability to weather economic challenges.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 6.46 | 5.23 | 3.59 | 4.01 | 3.11 |
Interest coverage ratio measures a company's ability to cover its interest expenses with its operating income. Looking at the data provided for Encompass Health Corp, we observe some fluctuation in the interest coverage ratio over the years.
In December 31, 2020, the interest coverage ratio was 3.11, indicating that the company's operating income could cover its interest expenses around three times. This ratio improved to 4.01 in December 31, 2021, showing a better ability to meet interest obligations.
Although there was a slight decrease in the interest coverage ratio to 3.59 in December 31, 2022, it remained above 3, which is generally considered a healthy threshold. The company's ability to cover interest expenses then improved substantially to 5.23 in December 31, 2023, indicating a stronger financial position.
By December 31, 2024, Encompass Health Corp further enhanced its interest coverage ratio to 6.46, demonstrating a significant improvement in its capacity to pay interest charges from its operating income. Overall, the trend in the interest coverage ratio suggests that the company has been effectively managing its financial obligations and improving its ability to meet interest payments in recent years.