EMCOR Group Inc (EME)
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 | 2.63 | 2.68 | 2.80 | 2.42 | 2.47 |
EMCOR Group Inc has consistently maintained a strong solvency position based on its solvency ratios over the period from December 31, 2020, to December 31, 2024. The Debt-to-assets ratio, Debt-to-capital ratio, and Debt-to-equity ratio have all remained at 0.00 throughout this period, indicating that the company has no debt relative to its total assets, total capital, and equity, respectively. This signifies that EMCOR Group Inc predominantly finances its operations through equity rather than debt.
Furthermore, the Financial leverage ratio has shown a slight fluctuation but has generally decreased from 2.47 in 2020 to 2.63 in 2024. This decreasing trend indicates that the company's reliance on debt to finance its operations has slightly decreased over the years, which is considered positive for solvency.
Overall, these solvency ratios suggest that EMCOR Group Inc has a strong financial position with minimal debt obligations relative to its total assets, capital, and equity, along with a decreasing trend in financial leverage, indicating a stable and healthy solvency position over the years.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 365.48 | 51.75 | 54.97 | 104.34 | 66.08 |
The interest coverage ratio of EMCOR Group Inc has shown varying levels over the past five years. In December 2020, the ratio stood at 66.08, indicating that the company generated 66 times more earnings before interest and taxes (EBIT) than the interest expenses incurred during that period.
By December 2021, the interest coverage ratio improved significantly to 104.34, reflecting a stronger ability to cover interest payments with operating income. However, there was a notable decrease in the ratio to 54.97 by December 2022, suggesting a decline in the company's ability to service its debt obligations with its operating profits.
The trend continued to decrease in December 2023, with the interest coverage ratio falling further to 51.75. This decline may raise concerns about EMCOR's capacity to comfortably meet its interest payments from its operational earnings.
However, there was a substantial increase in the interest coverage ratio to 365.48 by December 2024, signifying a significant improvement in the company's ability to cover its interest expenses with operating income. This remarkable increase could indicate enhanced profitability or a reduction in interest expenses during that period.
In summary, the interest coverage ratio of EMCOR Group Inc has displayed fluctuations over the years, with a notable improvement in 2021 followed by a decline and a subsequent sharp increase in 2024. It is essential for stakeholders to monitor this ratio closely to assess the company's ability to manage its debt obligations and ensure financial stability.