Heritage Financial Corporation (HFWA)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 8.23 | 8.41 | 8.75 | 8.70 | 8.06 |
Solvency ratios are important indicators of a company's ability to meet its long-term financial obligations. Based on the provided data for Heritage Financial Corporation, we can see that the company's solvency ratios remain consistently strong over the five-year period.
The Debt-to-assets ratio, Debt-to-capital ratio, and Debt-to-equity ratio are all reported as 0.00 for each year from 2020 to 2024. This indicates that the company has no debt relative to its assets, capital, or equity during this period. A lower debt ratio suggests a lower financial risk and greater financial stability for the company.
Furthermore, the Financial leverage ratio, which measures the extent to which a company is using debt to finance its operations, shows a consistent trend around the 8 to 8.75 range from 2020 to 2024. While this ratio is relatively high, it remains stable over the years, indicating that the company's debt levels have not significantly increased or decreased during this period.
Overall, Heritage Financial Corporation maintains a strong solvency position, with negligible levels of debt relative to its assets, capital, and equity. The stable financial leverage ratio suggests a prudent approach to debt management, which contributes to the company's financial stability and ability to meet its long-term obligations.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 0.00 | 1.23 | 11.69 | 13.27 | 0.01 |
The interest coverage ratio for Heritage Financial Corporation has fluctuated significantly over the past five years. In 2020, the ratio was extremely low at 0.01, indicating a high risk of default on interest payments. However, there was a substantial improvement in 2021, with the ratio jumping to 13.27, signaling a strong ability to cover interest expenses with operating income.
In 2022 and 2023, the interest coverage remained relatively stable at 11.69 and 1.23, respectively, indicating continued but slightly declining ability to cover interest payments. By the end of 2024, the interest coverage ratio dropped to 0.00, suggesting that operating income was insufficient to cover interest expenses, which could raise concerns regarding the company's financial health and its ability to meet its debt obligations.
Overall, while there have been fluctuations in Heritage Financial Corporation's interest coverage ratio, sustained low ratios in recent years raise red flags regarding the company's financial stability and ability to service its debt effectively. Further analysis of the company's profitability and debt levels may be warranted to gain a deeper understanding of its financial position.