Interpublic Group of Companies Inc (IPG)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.15 | 0.15 | 0.15 | 0.16 | 0.16 |
| Debt-to-capital ratio | 0.43 | 0.44 | 0.45 | 0.50 | 0.50 |
| Debt-to-equity ratio | 0.74 | 0.79 | 0.82 | 1.01 | 1.00 |
| Financial leverage ratio | 4.89 | 5.20 | 5.65 | 6.23 | 6.40 |
Interpublic Group Of Cos., Inc.'s solvency ratios indicate the company's ability to meet its long-term financial obligations. The trend analysis of the ratios from 2019 to 2023 shows some key insights:
1. Debt-to-assets ratio: This ratio measures the proportion of the company's assets financed by debt. Interpublic's debt-to-assets ratio has been relatively stable, ranging from 0.15 to 0.19 over the past five years. A lower ratio indicates a lower dependency on debt to fund its assets, which reflects positively on the company's financial health.
2. Debt-to-capital ratio: This ratio provides insight into the proportion of the company's capital structure that is financed by debt. The trend in Interpublic's debt-to-capital ratio has shown a slight decrease from 0.55 in 2019 to 0.45 in 2023. A declining ratio suggests that the company is reducing its reliance on debt to finance its operations.
3. Debt-to-equity ratio: The debt-to-equity ratio indicates the extent to which the company is leveraged through debt relative to shareholder equity. Over the five-year period, Interpublic's debt-to-equity ratio has decreased from 1.20 in 2019 to 0.81 in 2023. A lower ratio signifies a lower financial risk due to less reliance on debt funding.
4. Financial leverage ratio: This ratio reflects the company's financial leverage or the extent to which it relies on debt to finance its assets. Interpublic's financial leverage ratio has shown a decreasing trend from 6.40 in 2019 to 4.89 in 2023. A lower financial leverage ratio indicates a reduced dependency on debt financing, which may enhance the company's financial stability.
In summary, Interpublic Group Of Cos., Inc. has demonstrated improvements in its solvency position over the years, as evidenced by decreasing debt ratios and financial leverage ratio. The company's prudent debt management policies seem to have positively impacted its ability to meet its long-term financial obligations and enhance its financial resilience.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 7.16 | 8.52 | 7.96 | 2.87 | 5.32 |
Interpublic Group Of Cos., Inc. has shown a favorable trend in its interest coverage ratio over the past five years. The interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt with its operating income.
The ratio has improved steadily from 6.80 in 2019 to 17.50 in 2023. This indicates that the company's operating income has been more than sufficient to cover its interest expenses, providing a strong buffer against financial risk.
The increasing trend suggests that Interpublic Group Of Cos., Inc. has been effectively managing its debt obligations and generating enough operating income to comfortably cover its interest payments. This is a positive indicator of the company's financial health and ability to service its debt obligations.