Gogo Inc (GOGO)
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 | — | — | — |
| Debt-to-equity ratio | 0.00 | 0.00 | — | — | — |
| Financial leverage ratio | 17.73 | 19.19 | — | — | — |
1. Debt-to-assets ratio: Gogo Inc has maintained a consistent debt-to-assets ratio of 0.00% from 2020 to 2024. This suggests that the company's total debt is negligible in comparison to its total assets over the years.
2. Debt-to-capital ratio: The debt-to-capital ratio was not available for 2020 and 2021. However, from 2023 to 2024, the ratio stands at 0.00%, indicating that Gogo Inc's debt constitutes a minimal portion of its total capital structure in those years.
3. Debt-to-equity ratio: Similar to the debt-to-capital ratio, the debt-to-equity ratio was not provided for 2020 and 2021. In 2023 and 2024, the ratio is recorded at 0.00%, signifying that Gogo Inc's debt is almost non-existent relative to its equity in those years.
4. Financial leverage ratio: The financial leverage ratio, which indicates the proportion of debt in a company's capital structure, was not available for 2020 to 2022. In 2023 and 2024, the financial leverage ratio decreased from 19.19 to 17.73, showcasing a downward trend. This implies that Gogo Inc has reduced its reliance on debt financing in favor of other sources to fuel its operations and growth.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 1.00 | 3.76 | 3.72 | 0.55 | 0.61 |
Interest coverage ratio indicates a company's ability to meet its interest obligations on outstanding debt. A higher ratio is generally preferred as it suggests a stronger ability to cover interest expenses.
For Gogo Inc, the interest coverage ratio has fluctuated over the years. In December 31, 2020, the ratio was particularly low at 0.61, indicating that the company's operating income was just enough to cover its interest expenses, posing a potential risk.
However, there was a slight decline in the interest coverage ratio to 0.55 by December 31, 2021, which further heightened concerns regarding the company's ability to cover its interest payments.
In the subsequent years, there was a significant improvement in the interest coverage ratio. By December 31, 2022, the ratio increased to 3.72, signifying a more comfortable position for Gogo Inc in meeting its interest obligations. This positive trend continued in December 31, 2023, where the ratio improved to 3.76, further strengthening the company's ability to cover its interest expenses.
However, there was a noticeable decline in the interest coverage ratio to 1.00 by December 31, 2024, which may raise some concerns, as the ratio is now lower compared to the previous years. This decrease might suggest potential challenges in meeting interest payments based on the available operating income.
Overall, while Gogo Inc has shown improvement in its interest coverage ratio over the years, the recent decline in 2024 warrants careful monitoring to ensure the company can continue to meet its interest obligations effectively.