EMCOR Group Inc (EME)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.01 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.02 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.02 |
| Financial leverage ratio | 2.68 | 2.80 | 2.42 | 2.47 | 2.35 |
The solvency ratios of Emcor Group, Inc. provide insights into the company's ability to meet its financial obligations and the level of financial risk associated with its capital structure.
The debt-to-assets ratio measures the proportion of the company's assets financed by debt. Emcor Group has consistently maintained a low debt-to-assets ratio over the past five years, indicating a strong financial position with minimal reliance on debt to fund its assets.
The debt-to-capital ratio reflects the percentage of the company's capital structure that is attributable to debt. Emcor Group's debt-to-capital ratio has shown a decreasing trend since 2020, implying a decreasing reliance on debt to fund its operations and investments.
The debt-to-equity ratio compares the amount of debt and equity used to finance the company's assets. Emcor Group has also demonstrated a declining trend in its debt-to-equity ratio over the past five years, suggesting a reduction in financial leverage and an increasing reliance on equity financing.
The financial leverage ratio measures the extent to which the company uses debt to finance its operations. Emcor Group's financial leverage ratio has fluctuated slightly over the past five years but remains within a reasonable range, indicating a balanced capital structure with a mix of debt and equity financing.
Overall, Emcor Group, Inc.'s solvency ratios reflect a conservative approach to financing its operations, with a decreasing reliance on debt and a stable financial position that supports its ability to meet its financial obligations effectively.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 51.73 | 43.33 | 88.16 | 29.01 | 33.62 |
Emcor Group, Inc.'s interest coverage ratio has demonstrated a positive trend over the past five years, indicating the company's increasing ability to meet its interest obligations. The interest coverage ratio has shown a significant improvement from 40.02 in 2019 to 492.21 in 2023. This substantial increase suggests that Emcor Group's earnings before interest and taxes (EBIT) are substantially higher than its interest expenses.
The significant improvement in the interest coverage ratio is a positive indicator of Emcor Group's financial health and ability to service its debt obligations. A higher interest coverage ratio provides a cushion for the company in times of economic downturn or financial stress, as it indicates the company has a stronger capacity to make interest payments from its operating income.
Overall, the consistent improvement in Emcor Group's interest coverage ratio reflects a positive financial performance and indicates a reduced risk of default on its debt obligations.