Graham Holdings Co (GHC)

Graham Holdings Co. has demonstrated consistent and favorable solvency ratios over the five-year period from 2019 to 2023. The company's debt-to-assets ratio has remained relatively stable, ranging from 0.08 to 0.11 during this period. This indicates that Graham Holdings Co. maintains a low level of debt in proportion to its total assets, which suggests a strong ability to cover its obligations with its asset base.

Similarly, the debt-to-capital ratio and debt-to-equity ratio have shown a consistent and improving trend over the years. The debt-to-capital ratio has decreased from 0.13 in 2019 to 0.17 in 2023, indicating that the company relies less on debt financing relative to its total capital structure. The decreasing trend of the debt-to-equity ratio, from 0.15 in 2019 to 0.20 in 2023, also signals that Graham Holdings Co. is becoming less leveraged and relies more on equity to finance its operations.

The financial leverage ratio has fluctuated slightly but has generally been within a narrow range from 1.69 to 1.81. This ratio measures the company's total assets relative to its equity, showing that Graham Holdings Co. has been maintaining a stable level of financial leverage.

Overall, based on the solvency ratios analyzed, Graham Holdings Co. appears to have a solid financial position with prudent debt management practices, low leverage, and a strong ability to meet its financial obligations.

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Coverage ratios

Based on the interest coverage ratios provided for Graham Holdings Co. over the past five years, we can observe a fluctuating trend. The interest coverage ratio measures the company's ability to meet its interest obligations with its operating income. A higher ratio indicates that the company is more capable of servicing its debt.

In 2019, Graham Holdings Co. had the highest interest coverage ratio of 7.00, suggesting a robust ability to pay interest expenses from its operating income. However, this ratio decreased in the subsequent years, reaching its lowest point in 2023 at 2.91. This decline may indicate a potential strain on the company's ability to cover its interest obligations with its operating earnings.

It is essential to consider the reasons behind the fluctuations in interest coverage, such as changes in operating income, interest rates, or the company's debt levels. Investors and stakeholders should closely monitor this ratio to assess Graham Holdings Co.'s financial health and ability to manage its debt effectively.