GATX Corporation (GATX)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 4.98 | 4.96 | 4.73 | 4.57 | 4.36 |
The solvency ratios for GATX Corp. for the years 2019 to 2023 indicate the company's ability to meet its long-term financial obligations and the extent to which its operations are financed by debt.
1. Debt-to-assets ratio: GATX's debt-to-assets ratio has been increasing steadily over the years, reaching 0.65 in 2023. This suggests that 65% of the company's assets are financed by debt, indicating a moderate level of leverage.
2. Debt-to-capital ratio: The debt-to-capital ratio has remained relatively stable around 0.75 to 0.76 for the past five years. This ratio indicates that around 75-76% of GATX's capital comes from debt, while the remaining portion is from equity.
3. Debt-to-equity ratio: GATX's debt-to-equity ratio has been on an upward trend, increasing from 2.62 in 2019 to 3.26 in 2023. This indicates that the company is relying more on debt financing relative to shareholders' equity over time.
4. Financial leverage ratio: The financial leverage ratio, which measures the proportion of the company's assets financed by debt relative to shareholders' equity, has also shown an upward trend from 4.51 in 2019 to 4.98 in 2023. This indicates that GATX is increasingly relying on debt to fund its operations.
Overall, the increasing trend in these solvency ratios suggests that GATX Corp. has been taking on more debt to fund its operations and investments over the years. While moderate levels of leverage can be healthy for a company, investors and creditors may monitor these ratios closely to assess the company's ability to manage its debt levels and meet its financial obligations in the long term.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 2.21 | 1.98 | 1.96 | 1.99 | 2.40 |
The interest coverage ratio for GATX Corp. has shown some fluctuation over the past five years. In 2023 and 2022, the company's interest coverage ratio remained consistent at 1.75, indicating that the company earned $1.75 in operating income for every $1 of interest expense.
The slight decrease in the interest coverage ratio in 2021 to 1.46 may suggest a tighter ability to cover interest payments compared to the previous years. However, this ratio improved in 2020 to 1.83, indicating a better ability to cover interest expenses that year. The highest interest coverage ratio was seen in 2019 at 2.10, demonstrating a stronger ability to meet interest obligations with operating income.
Overall, the trend in GATX Corp.'s interest coverage ratio shows some variability, which may warrant further investigation into the company's financial health and ability to manage its debt obligations effectively.