Granite Construction Incorporated (GVA)

Solvency ratios

Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Debt-to-assets ratio 0.22 0.16 0.19 0.14 0.13 0.12 0.13 0.13 0.13 0.13 0.13 0.14 0.14 0.16 0.16 0.15 0.14 0.15 0.15 0.14
Debt-to-capital ratio 0.39 0.30 0.34 0.24 0.23 0.23 0.25 0.24 0.25 0.25 0.26 0.27 0.25 0.29 0.28 0.25 0.24 0.25 0.24 0.22
Debt-to-equity ratio 0.63 0.42 0.51 0.31 0.30 0.31 0.33 0.32 0.34 0.34 0.35 0.37 0.34 0.42 0.38 0.33 0.31 0.33 0.32 0.28
Financial leverage ratio 2.88 2.70 2.64 2.24 2.27 2.57 2.62 2.50 2.58 2.60 2.59 2.63 2.44 2.56 2.35 2.23 2.19 2.21 2.20 2.01

Granite Construction Inc.'s solvency ratios demonstrate consistency in maintaining a healthy financial position across the quarters. The debt-to-assets ratio has ranged from 0.13 to 0.23 over the past eight quarters, indicating that the company's total debt as a proportion of its total assets has remained relatively stable. A lower debt-to-assets ratio suggests a lower financial risk and greater financial stability.

The debt-to-capital ratio has shown a similar trend, hovering between 0.23 and 0.40 during the same period. This ratio reflects the extent to which debt is used to finance the company's operations relative to its total capital structure. A lower debt-to-capital ratio indicates a lower reliance on debt for financing.

The debt-to-equity ratio has also remained relatively steady, ranging from 0.30 to 0.67. This ratio indicates the proportion of debt and equity used to finance the company's assets, with a lower ratio suggesting a stronger equity position relative to debt.

Lastly, the financial leverage ratio has varied between 2.24 and 2.88, showing the company's ability to generate earnings from its assets to cover its fixed charges. A higher financial leverage ratio indicates a higher level of financial risk and potential volatility in earnings.

Overall, Granite Construction Inc.'s solvency ratios suggest a prudent approach to managing its debt levels, maintaining a healthy balance between debt and equity, and demonstrating consistent financial stability over the quarters analyzed.

Coverage ratios

Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Interest coverage 5.00 5.63 5.01 8.05 8.63 5.96 4.19 5.76 2.09 2.40 -2.94 -5.24 -5.01 -6.78 -0.91 -2.82 -3.02 -5.61 -4.42 -2.04

Interest coverage ratio is a financial metric that indicates a company's ability to pay interest expenses on outstanding debt. A higher interest coverage ratio suggests that the company is more capable of meeting its interest obligations.

In the case of Granite Construction Inc., the interest coverage ratio fluctuated significantly over the past eight quarters. In Q3 2023, the ratio spiked to an unusually high level of 6,300.12, which may be an anomaly or due to a specific event such as a one-time gain or write-off. Prior to Q3 2023, the interest coverage ratios were relatively stable, ranging from around 3 to 18.

The sharp increase in Q3 2023 raises concerns about the sustainability of such a high ratio and the underlying financial health of the company. Investors and analysts should further investigate the factors driving this sudden spike in the interest coverage ratio to assess any potential risks or abnormalities in Granite Construction Inc.'s financial position.