General Dynamics Corporation (GD)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.16 | 0.18 | 0.21 | 0.19 | 0.18 |
| Debt-to-capital ratio | 0.29 | 0.33 | 0.37 | 0.39 | 0.39 |
| Debt-to-equity ratio | 0.41 | 0.50 | 0.59 | 0.64 | 0.64 |
| Financial leverage ratio | 2.57 | 2.78 | 2.84 | 3.28 | 3.53 |
General Dynamics Corp.'s solvency ratios indicate the company's ability to meet its financial obligations and the extent of its reliance on debt financing. The trend analysis of the solvency ratios shows improvements in the company's solvency position over the past five years.
The debt-to-assets ratio has decreased consistently from 0.24 in 2019 to 0.17 in 2023, indicating that the company has reduced its dependence on debt to finance its assets, which is a positive sign for creditors and investors.
Similarly, the debt-to-capital ratio and debt-to-equity ratio have both shown a declining trend over the years, reaching 0.30 and 0.43 in 2023, respectively. This indicates that General Dynamics has become less leveraged and reliant on debt to fund its operations and expansion.
The financial leverage ratio, which measures the company's total assets in relation to its equity, has also improved from 3.60 in 2019 to 2.57 in 2023. This suggests that General Dynamics has been able to generate more value from its equity, which is favorable for shareholders.
Overall, the decreasing trend in these solvency ratios indicates that General Dynamics has been managing its debt levels effectively and strengthening its financial position over the years, which portrays a positive outlook for the company's solvency and financial stability.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 10.98 | 11.32 | 9.99 | 8.64 | 9.90 |
General Dynamics Corp.'s interest coverage ratio, a measure of its ability to cover interest expenses with operating income, has been relatively stable over the past five years. The trend shows an improvement in the company's ability to cover interest expenses. The interest coverage ratio was 12.38 in 2023, indicating that the company generated operating income 12.38 times higher than its interest expenses for that year. This suggests that General Dynamics Corp. has a healthy margin of safety to meet its interest obligations.
The increasing trend in the interest coverage ratio from 8.66 in 2020 to 12.38 in 2023 indicates a positive sign of efficiency and financial strength. It shows that General Dynamics Corp.'s profitability and earnings are sufficiently strong to cover its interest expenses, providing a cushion against potential financial risks.
Overall, the consistently high interest coverage ratios of General Dynamics Corp. reflect a strong financial position and indicate that the company is effectively managing its debt servicing obligations. This is a favorable indicator for investors and creditors, suggesting stability and reliability in the company's ability to meet its debt obligations.