Federal Signal Corporation (FSS)
Solvency ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 1.62 | 1.73 | 1.80 | 1.80 | 1.77 | 1.77 | 1.78 | 1.81 | 1.74 | 1.72 | 1.73 | 1.76 | 1.72 | 1.80 | 1.85 | 1.93 | 1.82 | 1.94 | 1.89 | 1.95 |
Federal Signal Corp.'s solvency ratios indicate the company's ability to meet its long-term financial obligations and the extent to which it relies on debt funding.
The debt-to-assets ratio has shown a decreasing trend over the past eight quarters, declining from 0.24 in Q4 2022 to 0.18 in Q4 2023. This signifies that the proportion of the company's assets financed by debt has decreased, which is a positive indicator of financial stability and lower risk.
Similarly, the debt-to-capital and debt-to-equity ratios have also exhibited a declining pattern over the same period. The debt-to-capital ratio decreased from 0.30 in Q4 2022 to 0.23 in Q4 2023, while the debt-to-equity ratio decreased from 0.42 in Q4 2022 to 0.30 in Q4 2023. These reductions suggest that Federal Signal Corp. has been reducing its reliance on debt financing for its capital structure, leading to a stronger financial position and lower financial risk.
The financial leverage ratio, which measures the company's level of financial leverage or the proportion of assets financed by debt, has shown a slight fluctuation but has remained relatively stable around 1.75 over the period under review. This indicates that Federal Signal Corp. has maintained a relatively consistent level of financial leverage, which can be seen as a moderate risk level in terms of debt utilization.
Overall, the decreasing trends in the debt-to-assets, debt-to-capital, and debt-to-equity ratios suggest an improvement in Federal Signal Corp.'s solvency position and a reduced dependence on debt funding, contributing to a healthier financial structure and lower financial risk for the company.
Coverage ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 11.30 | 10.42 | 10.55 | 12.53 | 15.65 | 19.04 | 23.71 | 26.11 | 27.13 | 30.36 | 29.59 | 23.89 | 22.88 | 20.94 | 18.92 | 20.72 | 18.56 | 17.54 | 16.36 | 14.44 |
The interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt with its operating income. A higher interest coverage ratio indicates a more favorable financial position.
Analyzing Federal Signal Corp.'s interest coverage ratio over the past eight quarters, we observe a general declining trend. In Q4 2022, the company had a robust interest coverage ratio of 27.53, indicating a strong ability to cover interest payments with its operating income. However, this ratio steadily decreased over the following quarters, reaching a low of 10.63 in Q3 2023.
The recent interest coverage ratios ranging from 10.63 to 12.53 demonstrate a moderate decline in the company's ability to cover its interest expenses. While Federal Signal Corp. continues to maintain a ratio above 1, indicating its ability to meet interest obligations, investors may want to monitor this trend closely to ensure the company can sustain its debt payments comfortably in the future.