Greenbrier Companies Inc (GBX)

Looking at the solvency ratios of Greenbrier Companies Inc over the past five years, we can observe the following trends:

1. Debt-to-assets ratio: This ratio measures the proportion of a company's assets that are financed by debt. Greenbrier Companies Inc has shown a decreasing trend in this ratio from 0.23 in 2023 to 0.15 in 2021, indicating a stronger financial position with lower reliance on debt to fund its assets.

2. Debt-to-capital ratio: This ratio indicates the percentage of a company's capital that is financed by debt. Greenbrier Companies Inc has also demonstrated a decline in this ratio from 0.42 in 2023 to 0.27 in 2021, reflecting a decreasing dependence on debt for capital funding.

3. Debt-to-equity ratio: This ratio shows the extent to which a company is using debt to finance its operations compared to equity. Greenbrier Companies Inc has followed a similar decreasing trend in this ratio over the years, from 0.72 in 2023 to 0.38 in 2021, affirming a healthier balance between debt and equity financing.

4. Financial leverage ratio: This ratio measures the proportion of a company's assets that are financed by debt versus equity. Greenbrier Companies Inc has exhibited an overall increasing trend in this ratio, indicating higher financial leverage over the years, with a ratio of 3.09 in 2024 as compared to 2.45 in 2020.

In conclusion, Greenbrier Companies Inc has managed to improve its solvency position over the years by reducing its reliance on debt for financing its operations and assets. This trend is positive as it signifies a stronger financial foundation and better financial health for the company over the long term.

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Coverage ratios

The interest coverage ratio for Greenbrier Companies Inc has shown fluctuating trends over the past five years. In 2024, the interest coverage ratio improved to 3.46, indicating that the company generated 3.46 times more earnings before interest and taxes (EBIT) than it needed to cover its interest expense. This represents a positive sign of the company's ability to meet its interest obligations comfortably.

Comparing this with previous years, we observe that the interest coverage ratio was relatively lower in 2023 and 2022 at 2.23 and 2.12, respectively. This suggests a slight decrease in the company's ability to cover its interest payments with its operating income during those years.

In contrast, in 2021, the interest coverage ratio dropped significantly to 0.95, indicating that the company's EBIT only covered its interest expense 0.95 times. This may raise concerns about the company's financial health and ability to meet its interest obligations without sufficient earnings. However, the ratio improved in 2020 to 3.86, showing a strong ability to cover interest payments that year.

Overall, while the recent increase in the interest coverage ratio in 2024 is a positive sign, it is essential for investors and stakeholders to monitor this ratio consistently to ensure the company's continued ability to meet its interest payments without excessive financial strain.