Knight Transportation Inc (KNX)

Based on the solvency ratios of Knight-Swift Transportation Holdings Inc over the past five years, we can observe the following trends:

1. Debt-to-assets ratio: This ratio indicates the proportion of the company's assets financed by debt. Knight-Swift's debt-to-assets ratio has ranged from 0.08 to 0.17 over the past five years, with a slight increase from 2022 to 2023. This suggests that the company has maintained a relatively conservative financing strategy with a moderate level of debt compared to its total assets.

2. Debt-to-capital ratio: This ratio reflects the extent to which a company relies on debt to finance its operations. Knight-Swift's debt-to-capital ratio has fluctuated between 0.11 and 0.23 during the period under review, showing a moderate increase from 2022 to 2023. The company's capital structure indicates a mix of debt and equity financing, with debt accounting for a significant but not excessive portion of the capital.

3. Debt-to-equity ratio: This ratio measures the level of financial leverage or risk borne by equity shareholders. Knight-Swift's debt-to-equity ratio has varied from 0.12 to 0.30 over the past five years, with a notable increase in 2023. The upward trend suggests a higher reliance on debt financing relative to equity, which could indicate increased financial risk for the company's shareholders.

4. Financial leverage ratio: This ratio determines the extent to which a company employs debt in its capital structure. Knight-Swift's financial leverage ratio has ranged from 1.44 to 1.82 over the period, showing a gradual increase over time. The rising trend indicates a higher level of financial risk resulting from increased debt usage to support the company's operations and growth.

In summary, Knight-Swift Transportation Holdings Inc has maintained a relatively stable and moderate level of debt relative to its assets and capital structure. However, there has been an upward trend in the company's debt levels and financial leverage over the years, signaling a potential increase in financial risk that investors and stakeholders should monitor closely.

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Coverage ratios

The interest coverage ratio measures a company's ability to meet its interest obligations on outstanding debt. A higher interest coverage ratio indicates a stronger ability to cover interest expenses with operating income.

Analyzing Knight-Swift Transportation Holdings Inc's interest coverage over the past five years, we observe fluctuations in the ratio:

- In 2023, the interest coverage ratio was 3.23, indicating that the company's operating income was able to cover its interest expenses approximately three times over. This represents a decrease from the previous year.
- In 2022, the interest coverage ratio significantly improved to 24.09, suggesting a substantial increase in the company's ability to meet interest obligations compared to the prior year.
- In 2021, the interest coverage ratio was 48.38, reflecting a further improvement from the previous year and indicating a strong ability to cover interest costs with operating income.
- In 2020, the interest coverage ratio was 37.04, reflecting a slight decrease compared to 2021 but still showing a robust ability to cover interest expenses.
- In 2019, the interest coverage ratio stood at 16.83, suggesting a moderate ability to cover interest obligations with operating income.

Overall, Knight-Swift Transportation Holdings Inc's interest coverage has shown varying levels over the past five years, with some years witnessing strong improvements in the ratio. It is essential for investors and creditors to monitor these fluctuations to assess the company's financial health and its ability to service its debt obligations effectively.