Graham Holdings Co (GHC)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| 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 | 1.80 | 1.81 | 1.76 | 1.69 | 1.71 |
Graham Holdings Co's solvency ratios indicate a consistently strong financial position over the years.
1. Debt-to-assets ratio: The ratio has been consistently at 0.00 from 2020 to 2024. This indicates that the company has no debt relative to its total assets, signifying a low risk of insolvency due to excessive debt burden.
2. Debt-to-capital ratio: Similar to the debt-to-assets ratio, the debt-to-capital ratio has remained at 0.00 throughout the five-year period. This suggests that the company's capital structure is predominantly equity-financed, which can be viewed positively in terms of financial stability and reduced financial risk.
3. Debt-to-equity ratio: The debt-to-equity ratio has also been steady at 0.00 from 2020 to 2024. This signifies that the company's reliance on debt to finance its operations is very limited compared to its equity, indicating a strong solvency position and a conservative approach to debt management.
4. Financial leverage ratio: The financial leverage ratio has shown a slight fluctuation from 1.69 to 1.81 over the five-year period. While there has been a slight increase in leverage, the ratios are still relatively low, indicating that the company is not heavily reliant on debt to finance its operations and investments.
In summary, Graham Holdings Co's solvency ratios portray a financially stable and conservative capital structure, with minimal debt levels relative to assets, capital, and equity. This suggests a low risk of financial distress and indicates a prudent approach to managing the company's financial obligations.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 6.50 | 5.81 | 3.23 | 14.27 | 11.64 |
The interest coverage ratio for Graham Holdings Co has demonstrated fluctuations over the past five years. As of December 31, 2020, the interest coverage ratio stood at 11.64, indicating the company's ability to cover its interest payments nearly 12 times over with its operating profits. This ratio improved in the following year, reaching 14.27 by December 31, 2021, reflecting stronger earnings relative to interest expenses.
However, the interest coverage ratio saw a significant decline by December 31, 2022, dropping to 3.23. This sharp decrease suggests that Graham Holdings Co may have experienced challenges in generating sufficient operating income to cover its interest obligations during that period. Subsequently, the ratio improved to 5.81 by the end of December 31, 2023, indicating a partial recovery in the company's ability to service its interest payments.
By December 31, 2024, the interest coverage ratio for Graham Holdings Co increased to 6.50. Although this represents a further improvement compared to the previous year, the ratio remains below the levels observed in 2020 and 2021. Overall, fluctuations in the interest coverage ratio reflect the company's varying ability to meet its interest obligations from its operational earnings over the analyzed period.