Green Plains Renewable Energy Inc (GPRE)

The solvency ratios of Green Plains Inc provide insights into the company's ability to meet its long-term financial obligations and its financial leverage.

1. Debt-to-assets ratio: This ratio measures the proportion of a company's assets that are financed by debt. Green Plains Inc's debt-to-assets ratio has been relatively stable over the past five years, ranging from 0.30 to 0.33, indicating that on average, around 30-33% of the company's assets are financed by debt.

2. Debt-to-capital ratio: This ratio indicates the proportion of a company's capital structure that is financed by debt. Green Plains Inc's debt-to-capital ratio has also shown consistency, ranging from 0.41 to 0.45 over the same period. The company typically finances around 41-45% of its capital through debt.

3. Debt-to-equity ratio: The debt-to-equity ratio measures the extent to which a company is using debt to finance its operations compared to shareholders' equity. Green Plains Inc's debt-to-equity ratio has fluctuated over the years, but generally, it has been within the range of 0.70 to 0.81. This suggests that the company's financial structure has been moderately leveraged, with debt financing comprising around 70-81% of shareholders' equity.

4. Financial leverage ratio: The financial leverage ratio reflects the extent of a company's reliance on debt in its capital structure. Green Plains Inc's financial leverage ratio has varied between 2.26 to 2.44. This indicates that the company's financial structure is leveraged, with a ratio above 2 implying that the company relies more on debt financing rather than equity financing to support its growth and operations.

Overall, the solvency ratios for Green Plains Inc suggest a consistent level of debt utilization in the company's capital structure, with a moderate level of leverage. Investors and creditors can use these ratios to assess the company's ability to manage its long-term financial obligations effectively.

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Coverage ratios

Green Plains Inc's interest coverage ratio has shown fluctuations over the past five years. The interest coverage ratio measures the company's ability to pay its interest expenses with its operating income.

In 2023, the interest coverage ratio deteriorated significantly to -2.55, indicating that the company's operating income was insufficient to cover its interest expenses. This suggests potential financial distress and liquidity challenges.

The previous year, in 2022, the trend continued downward with an interest coverage ratio of -3.61, worsening the company's ability to service its debt obligations from its operating earnings.

However, in 2021, there was a significant improvement in the interest coverage ratio to -0.05, still below 1 but indicating a better ability to cover interest expenses compared to the previous years.

The year 2020 showed a slight decline in the interest coverage ratio to -1.44, indicating a marginal increase in the company's ability to cover interest payments from its operating income compared to 2019.

In 2019, the interest coverage ratio was at its lowest at -3.90, signaling a significant challenge for the company in meeting its interest obligations.

Overall, Green Plains Inc's interest coverage ratio has been volatile, with negative ratios in most years, suggesting a persistent struggle to generate sufficient operating income to cover its interest expenses. This indicates a higher risk for lenders and investors in terms of the company's financial stability and debt repayment capacity.