Gogo Inc (GOGO)

The solvency ratios of Gogo Inc indicate its ability to meet its long-term financial obligations. The debt-to-assets ratio has been fluctuating over the past five years, declining from 1.74 in 2020 to 0.76 in 2023. This suggests that the company has reduced its reliance on debt to finance its assets, which could enhance its financial stability.

Similarly, the debt-to-capital ratio has also shown a decreasing trend, dropping from 2.21 in 2020 to 0.94 in 2023. This indicates that the proportion of debt in the company's capital structure has decreased, which is a positive sign for its solvency.

The debt-to-equity ratio was only available for the year 2023, standing at 14.60, which indicates that the company is relying more on debt than equity to finance its operations. It is important for Gogo Inc to keep this ratio in check to avoid excessive leverage that could pose risks to its solvency.

Lastly, the financial leverage ratio, which reflects the total assets to shareholder's equity, was only available for 2023 at 19.19. This ratio helps in understanding the extent to which the company is using debt to fund its operations and investments.

Overall, the declining trends in the debt-to-assets ratio and debt-to-capital ratio suggest an improved solvency position for Gogo Inc, but the company should closely monitor its debt-to-equity ratio and financial leverage ratio to ensure a healthy balance between debt and equity in its capital structure.

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Coverage ratios

The interest coverage ratio measures a company's ability to pay its interest expenses on outstanding debt. A higher ratio indicates a company is more capable of meeting its interest obligations. Looking at the trend for Gogo Inc over the past five years, we observe fluctuations in its interest coverage ratio.

In 2023, Gogo Inc's interest coverage ratio was 2.56, showing a slight decrease from the previous year but still indicating that the company earned 2.56 times the amount needed to cover its interest expenses. This suggests that Gogo Inc's ability to meet its interest obligations has weakened compared to 2022.

In 2022, the interest coverage ratio improved significantly to 3.90, indicating an increase in the company's ability to cover its interest expenses. This positive trend suggests that Gogo Inc's financial health improved in 2022.

In 2021, the interest coverage ratio was 1.79, showing a slight decrease compared to the previous year. Although the ratio is above 1, indicating that the company can meet its interest payments, it still signals a lower ability to cover interest expenses compared to the previous year.

In 2020, the interest coverage ratio was 0.61, indicating that Gogo Inc had just enough earnings to cover its interest expenses. This low ratio raises concerns about the company's ability to meet its interest obligations.

In 2019, the interest coverage ratio was a mere 0.29, reflecting a significant decrease compared to the previous year. This sharp decline suggests that Gogo Inc was struggling to generate enough earnings to cover its interest expenses, indicating a potential financial distress.

Overall, Gogo Inc's interest coverage ratio has shown fluctuations over the past five years, reflecting varying levels of financial health and ability to meet interest obligations. It is crucial for the company to maintain a healthy interest coverage ratio to ensure its long-term financial stability.