Hertz Global Holdings Inc (HTZ)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| 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 | 7.96 | 8.51 | 6.65 | 301.93 | 13.92 |
Hertz Global Holdings Inc.'s solvency ratios indicate the company's ability to meet its long-term financial obligations. The trend in the debt-to-assets ratio has been increasing over the past three years, from 0.55 in 2021 to 0.64 in 2023. This suggests that a higher proportion of the company's assets are financed by debt, which may pose a higher risk in the event of financial distress.
Similarly, the debt-to-capital ratio has remained relatively stable at around 0.84 over the same period. This ratio signifies that 84% of the company's capital structure is comprised of debt, indicating a significant reliance on debt financing to support its operations and growth.
The debt-to-equity ratio has shown an upward trend, increasing from 3.66 in 2021 to 5.07 in 2023. This indicates that the company's debt levels are more than five times its equity, reflecting a relatively high degree of financial leverage and potential vulnerability to changes in interest rates or market conditions.
Furthermore, the financial leverage ratio has also increased over the three-year period, from 6.65 in 2021 to 7.96 in 2023. This ratio measures the company's total assets relative to its equity and indicates the extent to which the company relies on debt to finance its assets. The upward trend suggests a higher degree of financial risk associated with the company's capital structure.
In conclusion, the solvency ratios of Hertz Global Holdings Inc. show a concerning trend of increasing leverage and reliance on debt financing over the past three years, which may expose the company to higher financial risks and challenges in meeting its long-term obligations.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 5.69 | 47.21 | 6.61 | -28.19 | 1.10 |
The interest coverage ratio for Hertz Global Holdings Inc. has significantly declined from 6.33 in 2022 to 0.97 in 2023. This indicates that the company's ability to cover its interest expenses with its operating income has weakened substantially year over year. A ratio below 1 suggests that the company's operating income is inadequate to cover its interest obligations, which could signal financial distress and an increased risk of default on debt payments. Hertz Global Holdings Inc. should closely monitor this trend and take necessary actions to improve its interest coverage ratio to maintain financial stability and meet its debt obligations effectively.