Forward Air Corporation (FWRD)

Forward Air Corporation's solvency ratios indicate a very strong financial position with consistently low levels of debt relative to its assets, capital, and equity over the years analyzed. The Debt-to-assets ratio, Debt-to-capital ratio, and Debt-to-equity ratio have all been reported as 0.00% for each year from 2020 to 2024, suggesting that the company has no significant debt burden in relation to its total assets, capital, or equity.

However, there is a notable increase in the Financial leverage ratio over the years, which has jumped significantly from 1.91 in 2020 to 13.89 in 2024. This substantial rise indicates a higher reliance on debt financing compared to equity, which may raise concerns about the company's long-term financial stability and ability to meet its debt obligations if not managed carefully.

Overall, while the low debt ratios reflect a healthy solvency position for Forward Air Corporation, the steep increase in the Financial leverage ratio signals a shift towards a more leveraged capital structure, which merits close monitoring to ensure sustainable financial health in the future.

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Coverage ratios

Interest coverage ratio is a key financial metric that indicates a company's ability to cover its interest expenses with its operating income. A higher interest coverage ratio is generally considered better as it signifies that the company is more capable of meeting its interest obligations.

From the data provided for Forward Air Corporation's interest coverage ratio over the years:
- In December 2020, the interest coverage ratio was 16.21, indicating that the company's operating income was sufficient to cover its interest expenses approximately 16 times.
- By December 2021, the interest coverage ratio improved to 36.72, suggesting a significant increase in the company's ability to cover its interest payments.
- As of December 2022, the interest coverage ratio further improved to 48.19, reflecting a robust ability to meet interest obligations and indicating a strong financial position.
- However, there was a notable decline in the interest coverage ratio by December 2023 to 2.79, which may raise concerns about the company's ability to cover its interest expenses adequately.
- Furthermore, the interest coverage ratio turned negative by December 2024, standing at -5.61. A negative ratio indicates that the company's operating income is insufficient to cover its interest expenses, raising red flags about its financial health and solvency.

In summary, while Forward Air Corporation showed a strong ability to cover its interest expenses in 2021 and 2022, there was a sharp decline in 2023 and a concerning negative trend in 2024, highlighting potential financial challenges that may require immediate attention.