KAR Auction Services Inc (KAR)
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 | 3.44 | 2.44 | 2.40 | 3.53 | 3.14 |
KAR Auction Services Inc maintains a strong solvency position as evidenced by consistently low debt-to-assets, debt-to-capital, and debt-to-equity ratios of 0.00 for the years ending December 31, 2020 to December 31, 2024. These ratios indicate that the company's debt levels are negligible relative to its assets, capital structure, and equity.
The financial leverage ratio, however, displays some variability over the same period, with values of 3.14 in 2020, 3.53 in 2021, 2.40 in 2022, 2.44 in 2023, and 3.44 in 2024. Despite the fluctuation, the financial leverage ratio generally suggests that the company has a moderate level of financial leverage, with assets being financed by a mix of equity and debt.
Overall, the solvency ratios reflect KAR Auction Services Inc's ability to meet its financial obligations without excessive reliance on debt, indicating a stable and secure financial position.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 8.24 | 0.06 | 1.32 | 1.01 | 1.04 |
The interest coverage ratio for KAR Auction Services Inc has shown fluctuations over the years based on the provided data.
As of December 31, 2020, the interest coverage ratio was 1.04, indicating that the company's operating income was just able to cover its interest expenses.
By December 31, 2021, the interest coverage ratio slightly decreased to 1.01, suggesting a weaker ability to cover interest costs with operating income.
However, there was an improvement in the interest coverage ratio by December 31, 2022, where it increased to 1.32, indicating a better ability to meet interest obligations with operating income.
The performance deteriorated significantly by December 31, 2023, as the interest coverage ratio dropped sharply to 0.06, reflecting potential financial distress and a significant challenge in meeting interest obligations.
In contrast, by December 31, 2024, the interest coverage ratio spiked to 8.24, signaling a substantial improvement in the company's ability to cover interest expenses with its operating income.
Overall, the trend in KAR Auction Services Inc's interest coverage ratio has been volatile, with fluctuations reflecting varying levels of financial health and ability to manage interest obligations. It is essential for stakeholders to monitor this ratio closely to assess the company's financial risk and sustainability.