Chart Industries Inc (GTLS)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.39 | 0.35 | 0.20 | 0.09 | 0.31 |
| Debt-to-capital ratio | 0.56 | 0.43 | 0.27 | 0.12 | 0.38 |
| Debt-to-equity ratio | 1.28 | 0.76 | 0.37 | 0.14 | 0.62 |
| Financial leverage ratio | 3.27 | 2.21 | 1.88 | 1.63 | 2.02 |
The solvency ratios of Chart Industries Inc reflect its financial leverage and ability to meet its long-term obligations. The trend analysis of the data indicates a fluctuation in solvency ratios over the past five years.
1. Debt-to-assets ratio: This ratio has generally increased from 0.17 in 2020 to 0.42 in 2023, indicating that a larger portion of the company's assets is funded by debt.
2. Debt-to-capital ratio: The trend in this ratio shows an overall increase from 0.22 in 2020 to 0.58 in 2023, suggesting that a higher proportion of the company's capital structure is financed through debt.
3. Debt-to-equity ratio: There is a notable increase in this ratio from 0.28 in 2020 to 1.38 in 2023, indicating a higher dependency on debt relative to equity for financing operations.
4. Financial leverage ratio: This ratio has also increased significantly over the five-year period, from 1.63 in 2019 to 3.27 in 2023, reflecting a higher level of financial risk and leverage in the company's capital structure.
Overall, the increasing trend in all solvency ratios implies that Chart Industries Inc has been relying more on debt to finance its operations and growth. While higher leverage can amplify returns, it also increases the company's risk exposure and its ability to withstand economic downturns or unexpected events. Investors and stakeholders should closely monitor the company's debt levels and its ability to manage and service its increasing debt obligations.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 1.20 | 5.89 | 3.95 | 2.58 | 2.94 |
Chart Industries Inc's interest coverage ratio has fluctuated over the past five years, ranging from a low of 1.45 in 2023 to a high of 8.30 in 2021. The interest coverage ratio indicates the company's ability to cover its interest expenses with its earnings before interest and taxes (EBIT).
A higher interest coverage ratio is generally seen as favorable as it suggests that the company is generating more than enough earnings to cover its interest obligations. In this case, the significant drop in the interest coverage ratio from 8.30 in 2021 to 1.45 in 2023 may raise concerns about the company's ability to comfortably meet its interest payments with its current level of earnings.
It is essential for stakeholders to closely monitor Chart Industries Inc's interest coverage ratio to ensure that the company remains financially stable and can effectively manage its debt obligations. Further analysis of the company's financial performance and debt management strategies may provide insights into the reasons behind the fluctuations in the interest coverage ratio.