Chart Industries Inc (GTLS)

Based on the solvency ratios of Chart Industries Inc:

1. Debt-to-assets ratio: This ratio remained consistently at 0.00 from December 31, 2020, to December 31, 2024, indicating that the company had no debt in relation to its total assets during this period. A lower debt-to-assets ratio is generally favorable as it signifies lower financial risk.

2. Debt-to-capital ratio: Similarly, the debt-to-capital ratio also remained at 0.00 across the same period, suggesting that the company's debt levels were negligible in relation to its total capital. A low debt-to-capital ratio indicates a lower reliance on debt financing.

3. Debt-to-equity ratio: The debt-to-equity ratio also stayed at 0.00 from December 31, 2020, to December 31, 2024, indicating that the company's debt was minimal compared to its equity. A lower debt-to-equity ratio is seen as positive as it reflects lower financial leverage and lower risk.

4. Financial leverage ratio: The financial leverage ratio increased from 1.63 on December 31, 2020, to 3.23 on December 31, 2024. This suggests that the company's level of financial leverage, or the extent to which it relies on debt financing, increased significantly over the period. A higher financial leverage ratio indicates higher financial risk and can make the company more vulnerable to economic downturns or interest rate fluctuations.

Overall, the debt-related solvency ratios of Chart Industries Inc indicate a strong financial position with minimal debt levels relative to its assets, capital, and equity. However, the increasing financial leverage ratio over the years warrants close monitoring to ensure sustainable financial health and risk management.

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Coverage ratios

Based on the interest coverage ratios provided for Chart Industries Inc for the years 2020 to 2024, the company's ability to cover its interest expenses has varied over time.

In 2020, the interest coverage ratio was 6.06, indicating that the company generated operating income 6.06 times greater than its interest expenses that year. This suggests a relatively healthy level of interest coverage and implies that the company had a comfortable cushion to meet its interest obligations.

In 2021, the interest coverage ratio improved to 8.70, reflecting a stronger ability to cover interest expenses compared to the previous year. This increase is a positive indicator of Chart Industries' improving financial health and suggests that the company's operating earnings were more than sufficient to meet its interest payments.

However, the interest coverage ratio dropped significantly in 2022 to 4.53, which may raise some concerns about the company's ability to cover its interest costs effectively. A lower interest coverage ratio could indicate increased financial risk, as the company's operating income may not be as ample to cover interest payments in this year.

By 2023, the interest coverage ratio further declined to 1.20, signaling a potentially precarious financial position for Chart Industries. A ratio of 1.20 implies that the company's operating income was just enough to cover its interest expenses, leaving little room for unforeseen circumstances or financial setbacks.

In 2024, the interest coverage ratio slightly improved to 1.97 but still remains at a level indicating a narrow margin of safety in meeting interest obligations. Chart Industries may need to closely monitor its financial performance and take measures to strengthen its ability to cover interest expenses and maintain financial stability.

Overall, the fluctuating trends in Chart Industries Inc's interest coverage ratios suggest varying levels of financial risk and highlight the importance of closely monitoring the company's financial health and operational performance in relation to its debt obligations.