Kirby Corporation (KEX)

Solvency ratios provide insights into a company's ability to meet its long-term financial obligations.

Debt-to-assets ratio:

Kirby Corp.'s debt-to-assets ratio has been relatively stable, ranging between 0.18 and 0.21 over the past eight quarters. This indicates that, on average, 18-21% of the company's total assets are financed through debt. The decreasing trend from 0.21 in Q2 2022 to 0.18 in Q4 2023 suggests that the company has been reducing its reliance on debt to fund its assets.

Debt-to-capital ratio:

Similarly, Kirby Corp.'s debt-to-capital ratio has also shown consistency, fluctuating between 0.24 and 0.28. This ratio represents the proportion of the company's capital that is financed through debt, ranging from 24% to 28%. The decreasing trend from 0.28 in Q1 2022 to 0.24 in Q4 2023 implies a positive sign as the company may be reducing its debt burden relative to its capital.

Debt-to-equity ratio:

The debt-to-equity ratio for Kirby Corp. has ranged from 0.32 to 0.40 over the past two years. This ratio indicates the amount of leverage the company employs to finance its operations, with 32-40% of the company's equity being financed through debt. The decreasing trend from 0.40 in Q1 2022 to 0.32 in Q4 2023 suggests an improvement in the company's financial health as it reduces its reliance on debt financing relative to equity.

Financial leverage ratio:

Kirby Corp.'s financial leverage ratio has experienced some minor fluctuations, ranging between 1.79 and 1.85. This ratio indicates the proportion of the company's assets that are financed through debt rather than equity, with the company having a leverage ratio of 1.80-1.85. The stability of this ratio suggests that Kirby Corp. has maintained a relatively consistent level of leverage in its capital structure, with a slightly decreasing trend indicated by the decline from 1.85 in Q1 2022 to 1.80 in Q4 2023.

Overall, the solvency ratios for Kirby Corp. show a stable financial position with a decreasing trend in debt ratios over the quarters, indicating a positive direction in managing its long-term debt obligations and improving its financial health.

---

Coverage ratios

Interest coverage is a key financial ratio that indicates a company's ability to meet its interest payment obligations on outstanding debt. The interest coverage ratio is calculated by dividing a company's earnings before interest and taxes (EBIT) by its interest expenses for a specific period.

For Kirby Corp., the interest coverage ratio has shown a consistent improvement over the past eight quarters, demonstrating the company's strengthening ability to cover its interest expenses. In Q1 2022, the interest coverage ratio stood at 2.41, indicating that the company's EBIT was 2.41 times higher than its interest expenses for that quarter.

The upward trend continued with each subsequent quarter, reaching a ratio of 6.35 in Q4 2023. This substantial increase in interest coverage over the period signifies that Kirby Corp.'s earnings have been increasing at a faster pace than its interest expenses, enhancing the company's financial stability and reducing its risk of default on debt obligations.

Overall, the steady improvement in Kirby Corp.'s interest coverage ratio reflects positively on the company's financial health and suggests that it has been effectively managing its debt and generating sufficient earnings to cover interest payments.