Group 1 Automotive Inc (GPI)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.11 | 0.13 | 0.14 | 0.12 | 0.01 |
| Debt-to-capital ratio | 0.24 | 0.28 | 0.31 | 0.30 | 0.03 |
| Debt-to-equity ratio | 0.31 | 0.38 | 0.46 | 0.44 | 0.03 |
| Financial leverage ratio | 2.91 | 3.00 | 3.15 | 3.51 | 4.44 |
Group 1 Automotive, Inc.'s solvency ratios indicate the company's ability to meet its long-term financial obligations and the proportion of debt in its capital structure over the past five years.
1. Debt-to-assets ratio: This ratio measures the percentage of the company's assets financed by debt. Group 1 Automotive, Inc. has maintained a relatively stable debt-to-assets ratio between 0.45 and 0.48 over the past five years. Although there was a slight increase in 2020, the ratio decreased in 2023, reflecting prudent management of debt levels relative to total assets.
2. Debt-to-capital ratio: This ratio signifies the proportion of the company's capital structure that is financed through debt. Group 1 Automotive, Inc. has consistently maintained a debt-to-capital ratio between 0.58 and 0.71 over the period. The stable trend in this ratio indicates that the company has managed its overall capital structure effectively.
3. Debt-to-equity ratio: This metric indicates the level of debt relative to shareholders' equity. Despite fluctuating slightly, Group 1 Automotive, Inc.'s debt-to-equity ratio has shown a decreasing trend from 2.47 in 2019 to 1.37 in 2023. This reduction suggests a decrease in financial leverage through lower dependence on debt funding compared to equity.
4. Financial leverage ratio: This ratio compares the company's total assets to its equity, reflecting the degree of financial leverage. Group 1 Automotive, Inc.'s financial leverage has decreased over the past five years from 4.44 in 2019 to 2.91 in 2023. This downward trend indicates a reduction in financial risk and an improvement in the company's financial stability.
In summary, Group 1 Automotive, Inc. has demonstrated prudent management of its solvency ratios, with stable debt levels, decreasing financial leverage, and a stronger balance between debt and equity financing. This indicates a healthier financial position and a reduced risk of default on long-term obligations.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 8.47 | 12.57 | 13.82 | 7.01 | 4.42 |
Group 1 Automotive, Inc.'s interest coverage has shown fluctuations over the past five years. In 2023, the interest coverage ratio decreased to 6.11 from 10.43 in 2022. This decline may indicate a weaker ability to cover interest expenses with operating income. However, it is still higher compared to the ratios in 2020 and 2019, which were 5.13 and 2.83, respectively. The ratios in 2021 (10.62) and 2022 (10.43) were relatively strong, indicating a healthy ability to meet interest obligations. Overall, while there has been some variability, Group 1 Automotive, Inc. has generally maintained a reasonable level of interest coverage over the years.