Installed Building Products Inc (IBP)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.42 | 0.47 | 0.50 | 0.46 | 0.50 |
| Debt-to-capital ratio | 0.55 | 0.63 | 0.67 | 0.63 | 0.69 |
| Debt-to-equity ratio | 1.25 | 1.68 | 2.00 | 1.70 | 2.18 |
| Financial leverage ratio | 2.96 | 3.60 | 3.97 | 3.72 | 4.40 |
1. Debt-to-assets ratio: Installed Building Products Inc has shown a decreasing trend in its debt-to-assets ratio over the past five years, indicating that the proportion of assets financed by debt has been decreasing. This ratio stood at 0.44 in 2023, demonstrating that 44% of the company's total assets are financed by debt.
2. Debt-to-capital ratio: The debt-to-capital ratio also shows a declining trend over the same period, indicating that the company has been relying less on debt to finance its operations relative to its total capital structure. In 2023, this ratio was 0.57, suggesting that 57% of the company's capital is financed by debt.
3. Debt-to-equity ratio: The debt-to-equity ratio of Installed Building Products Inc has decreased over the past five years, implying that the proportion of the company's equity used to finance operations has been increasing. In 2023, the ratio was 1.31, indicating that the company's debt is 1.31 times its equity.
4. Financial leverage ratio: The financial leverage ratio of the company has also seen a decreasing trend over the five-year period. A lower financial leverage ratio suggests that a company is relying less on debt to finance its operations. In 2023, this ratio was 2.96, meaning that the company's assets are funded 2.96 times by its equity.
Overall, the solvency ratios of Installed Building Products Inc reflect a positive trend towards reducing reliance on debt financing and increasing the proportion of equity in its capital structure. This could indicate improved financial stability and lower risk in the company's operations.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 10.00 | 8.29 | 5.73 | 5.33 | 4.30 |
The interest coverage ratio of Installed Building Products Inc has shown an improving trend over the past five years, indicating the company's ability to meet its interest obligations from its earnings. The ratio has increased from 4.31 in 2019 to 9.98 in 2023, demonstrating a steady improvement in the company's ability to cover its interest expenses with operating income.
A higher interest coverage ratio is generally seen as favorable as it suggests that the company is more capable of servicing its debt. Installed Building Products Inc's interest coverage ratio has consistently been above 1.0, which signifies that the company's earnings are sufficient to cover its interest expenses.
The increasing trend in the interest coverage ratio reflects positively on Installed Building Products Inc's financial performance and indicates a stronger financial position. This improvement may signal greater financial stability and decreased risk of default on debt obligations for the company.