Forward Air Corporation (FWRD)

The solvency ratios of Forward Air Corporation have exhibited significant fluctuations over the past five years. The debt-to-assets ratio, which measures the proportion of total assets financed by debt, has shown a decreasing trend, indicating a lower reliance on debt to fund operations and investments. This ratio has declined from 0.14 in 2021 to 0.00 in 2023, suggesting a stronger financial position in terms of asset coverage.

Similarly, the debt-to-capital ratio, representing the extent of capital derived from debt, has also exhibited a downward trend over the period under review. The ratio decreased from 0.21 in 2021 to 0.00 in 2023. This reduction indicates a more balanced capital structure with less reliance on debt financing.

Moreover, the debt-to-equity ratio, which measures the leverage of the company in terms of equity and debt, has followed a similar declining pattern. From 0.26 in 2021, the ratio decreased to 0.00 in 2023, indicating a healthier proportion of equity relative to debt in the capital structure.

Lastly, the financial leverage ratio, calculated as total assets divided by total equity, has shown fluctuations over the years. The ratio peaked in 2023 at 3.90, signifying a higher level of financial leverage compared to previous years. This could indicate increased financial risk associated with higher leverage.

Overall, the solvency ratios reflect a positive trend towards decreased reliance on debt financing and improved financial stability for Forward Air Corporation, as evidenced by the decreasing debt ratios and a more balanced capital structure. However, the recent increase in the financial leverage ratio in 2023 warrants further scrutiny to assess the implications of higher leverage on the company's financial risk and stability.

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Coverage ratios

The interest coverage ratio for Forward Air Corporation has fluctuated over the past five years. In 2023, the company's interest coverage ratio was 6.74, indicating that the company is able to cover its interest payments 6.74 times over with its earnings before interest and taxes (EBIT). This is a significant decrease from the previous year's ratio of 51.77, suggesting a potential decrease in the company's ability to meet its interest obligations from its operating earnings.

The extremely high interest coverage ratio of 529.24 in 2021 stands out, indicating a strong ability to comfortably cover interest expenses. This could be due to substantially higher EBIT relative to interest payments during that year. The ratios in 2020 and 2019, at 9.84 and 43.23 respectively, also indicate a healthy ability to cover interest expenses.

Overall, the fluctuation in the interest coverage ratio over the years may reflect changes in the company's financial performance and its ability to service its debt obligations. Investors and creditors may need to closely monitor the trend of the interest coverage ratio to assess the company's financial health and risk of default.