Fastenal Company (FAST)

Fastenal Company's solvency ratios have shown a positive trend over the years, indicating a strong financial position. The Debt-to-assets ratio has decreased from 0.09 in 2020 to 0.03 in 2024, reflecting the company's ability to reduce its debt in proportion to its assets.

Similarly, the Debt-to-capital ratio and Debt-to-equity ratio have also decreased consistently from 2020 to 2024, indicating lower reliance on debt funding and a healthier capital structure. The decreasing trend in these ratios suggests improved solvency and financial stability for the company.

Moreover, the Financial leverage ratio has shown a declining pattern from 1.45 in 2020 to 1.30 in 2024, signifying a decrease in the company's reliance on debt to fund its operations. This reduction in financial leverage indicates a lower risk of insolvency and a stronger overall financial position for Fastenal Company.

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Coverage ratios

The interest coverage ratio for Fastenal Company has shown a generally positive trend over the years, indicating the company's ability to comfortably meet its interest payments from its operating earnings.

As of December 31, 2020, the interest coverage ratio was 117.77, demonstrating very strong financial health and implying that Fastenal had earnings nearly 118 times its interest obligations for that year.

By the end of December 31, 2021, the interest coverage ratio improved further to 125.52, suggesting an even stronger capability to cover interest expenses from operating profits.

Although there was a slight decline in the interest coverage ratio to 101.70 by December 31, 2022, it remained above 100, indicating that Fastenal's operating income was still more than sufficient to cover its interest expenses.

Fastenal's interest coverage ratio rebounded strongly to 141.93 by December 31, 2023, signaling a robust financial position and an increased ability to cover interest payments comfortably.

Finally, as of December 31, 2024, the interest coverage ratio spiked to 206.85, the highest in the analyzed period, reflecting exceptional financial strength and ample earnings to service the company's interest obligations.

Overall, Fastenal Company's interest coverage ratios have generally shown a positive trend, demonstrating its strong financial standing and ability to easily meet its interest payment obligations with operating income.