WW Grainger Inc (GWW)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.28 | 0.30 | 0.36 | 0.38 | 0.32 |
| Debt-to-capital ratio | 0.42 | 0.48 | 0.56 | 0.57 | 0.51 |
| Debt-to-equity ratio | 0.73 | 0.94 | 1.26 | 1.31 | 1.03 |
| Financial leverage ratio | 2.62 | 3.11 | 3.52 | 3.44 | 3.24 |
The solvency ratios of W.W. Grainger Inc. have shown a generally improving trend over the past five years, indicating a strengthening financial position in terms of its ability to meet its long-term obligations.
The debt-to-assets ratio has been on a downward trajectory from 0.37 in 2019 to 0.28 in 2023. This suggests that the company has reduced its reliance on debt to finance its assets, which can be a positive sign of improved financial health.
Similarly, the debt-to-capital ratio has decreased from 0.54 in 2019 to 0.42 in 2023, indicating that the company has been relying less on debt and more on equity to fund its operations.
The debt-to-equity ratio has shown a decreasing trend from 1.31 in 2019 to 0.74 in 2023, reflecting a decreasing dependence on debt relative to equity for financing the company's assets and operations.
Finally, the financial leverage ratio has also been declining over the years, from 3.24 in 2019 to 2.62 in 2023, implying a reduction in the company's reliance on debt to fund its operations and investments.
Overall, the decreasing trend in these solvency ratios suggests that W.W. Grainger Inc. has been effectively managing its debt levels and improving its financial stability and ability to meet its long-term obligations.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 27.58 | 23.82 | 1,547.00 | 254.75 | 140.22 |
Interest coverage ratio measures the ability of a company to meet its interest payment obligations on outstanding debt. A higher interest coverage ratio indicates that a company is in a better position to cover its interest expenses from its operating income.
Analyzing W.W. Grainger Inc.'s interest coverage ratio over the last five years, we observe a generally increasing trend. The ratio has improved from 15.97 in 2019 to 27.58 in 2023. This indicates that the company's ability to cover its interest expenses with its operating income has strengthened over the years.
The significant increase in the interest coverage ratio from 2020 to 2021 suggests improved financial health and reduced financial risk for W.W. Grainger Inc. This trend continued in 2022 and 2023, indicating the company's ability to comfortably meet its interest obligations.
Overall, a consistently high interest coverage ratio for W.W. Grainger Inc. reflects a financially stable position and signifies a reduced risk of default on its debt obligations, which can be reassuring for investors and creditors.