Grocery Outlet Holding Corp (GO)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.10 | 0.14 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.19 | 0.25 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.24 | 0.34 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 2.44 | 2.50 | 2.65 | 2.70 | 2.93 |
The solvency ratios of Grocery Outlet Holding Corp indicate the company's ability to meet its long-term debt obligations. The trends over the past five years reveal a favorable financial position.
The debt-to-assets ratio has shown consistent improvement, decreasing from 0.14 in 2022 to 0.10 in 2023. This indicates that the company has a lower proportion of debt in relation to its total assets, which signifies lower financial risk.
Similarly, the debt-to-capital ratio has also decreased from 0.25 in 2022 to 0.19 in 2023. This suggests that the company is relying less on debt financing and is utilizing more of its own capital to fund its operations.
The debt-to-equity ratio has followed a downward trend, dropping from 0.34 in 2022 to 0.24 in 2023. This indicates that the company's reliance on debt relative to equity has been reducing, showcasing a stronger financial structure.
The financial leverage ratio, which measures the company's debt level in relation to its equity, has also shown improvement, declining from 2.50 in 2022 to 2.44 in 2023. This suggests that the company has been able to reduce its financial leverage, which is a positive sign of improved solvency.
Overall, based on the solvency ratios, Grocery Outlet Holding Corp appears to have a solid financial position with decreasing debt ratios over the years, indicating an improved ability to meet its long-term debt obligations.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 5.49 | 4.98 | 6.20 | 5.55 | 1.43 |
The interest coverage ratio for Grocery Outlet Holding Corp has shown a generally positive trend over the past five years, indicating the company's ability to meet its interest payment obligations comfortably. The ratio increased from 1.43 in 2019 to 5.49 in 2023, signifying a significant improvement in the company's ability to cover its interest expenses from its earnings.
A higher interest coverage ratio reflects a stronger financial position and lower risk of defaulting on interest payments. The company's interest coverage has been consistently above 1, indicating that Grocery Outlet Holding Corp has generated sufficient operating income to cover its interest expenses each year.
While there was a slight dip in 2022 compared to 2021, the ratio remained healthy at 4.98, which suggests the company was still able to comfortably cover its interest expenses. Overall, the trend of increasing interest coverage ratios over the years is a positive signal of the company's financial health and ability to manage its debt obligations effectively.