The Ensign Group Inc (ENSG)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.03 | 0.03 | 0.04 | 0.05 | 0.00 |
| Debt-to-capital ratio | 0.07 | 0.09 | 0.11 | 0.13 | 0.00 |
| Debt-to-equity ratio | 0.08 | 0.10 | 0.12 | 0.15 | 0.00 |
| Financial leverage ratio | 2.54 | 2.80 | 2.77 | 2.79 | 3.11 |
The solvency ratios of The Ensign Group Inc demonstrate a stable financial structure and a strong ability to meet its long-term obligations.
The Debt-to-assets ratio has been decreasing consistently from 0.05 in 2021 to 0.03 in 2024, indicating that the company's total debt relative to its total assets is on a downward trend.
Similarly, the Debt-to-capital ratio has also shown a decreasing trend, declining from 0.13 in 2021 to 0.07 in 2024. This suggests that the proportion of debt in the company's capital structure has reduced over the years.
The Debt-to-equity ratio has followed suit, decreasing from 0.15 in 2021 to 0.08 in 2024. This indicates that the company is relying less on debt financing in relation to equity to fund its operations.
The Financial leverage ratio, calculated as total assets divided by equity, has also decreased over the years from 3.11 in 2020 to 2.54 in 2024. This trend signifies a lower reliance on debt to finance the company's assets.
Overall, the decreasing trend in these solvency ratios reflects positively on The Ensign Group's financial health and its ability to effectively manage its debt levels relative to its assets, capital, and equity.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 43.24 | 34.67 | 33.37 | 38.22 | 24.15 |
The interest coverage ratio measures the ability of a company to meet its interest obligations on its debt. A higher interest coverage ratio indicates that the company is more capable of servicing its debt.
Looking at The Ensign Group Inc's interest coverage ratio over the past five years, we observe a consistently strong performance. The ratio has shown an increasing trend, starting at 24.15 in December 2020 and reaching 43.24 by December 2024. This signifies that the company's earnings before interest and taxes (EBIT) are sufficient to cover its interest expenses.
The steady improvement in The Ensign Group Inc's interest coverage ratio reflects a healthy financial position and indicates the company's ability to manage its debt effectively. A high interest coverage ratio is reassuring to investors and creditors as it implies lower financial risk and greater financial stability for the company.