LKQ Corporation (LKQ)
Solvency ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 2.45 | 2.55 | 2.38 | 2.20 | 2.21 | 2.22 | 2.17 | 2.21 | 2.18 | 2.11 | 2.12 | 2.17 | 2.19 | 2.26 | 2.35 | 2.49 | 2.55 | 2.58 | 2.62 | 2.64 |
The solvency ratios for LKQ Corp provide insight into the company's ability to meet its long-term financial obligations.
The debt-to-assets ratio has been relatively stable around 0.22 to 0.29 over the past eight quarters. This ratio indicates that LKQ Corp finances approximately 22% to 29% of its assets through debt, with the remainder funded by equity.
The debt-to-capital ratio has shown a similar trend, ranging from 0.32 to 0.42, suggesting that debt represents around 32% to 42% of the company's total capital structure. This ratio provides a broader view of the extent to which debt is used to fund the company's operations.
The debt-to-equity ratio has varied between 0.47 and 0.73, indicating that LKQ Corp has been utilizing varying levels of debt in relation to equity. A higher ratio signifies a higher reliance on debt financing and a potentially higher financial risk.
The financial leverage ratio, which measures the amount of assets financed by debt relative to equity, has ranged from 2.17 to 2.55. This ratio has shown some fluctuations, indicating changes in the company's capital structure over the quarters.
Overall, LKQ Corp's solvency ratios suggest that the company has maintained a reasonable balance between debt and equity in funding its operations. It is important to continue monitoring these ratios to ensure the company's ability to meet its financial obligations in the long term.
Coverage ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | — | — | — | — | — | — | — | 46.73 | 20.71 | 18.00 | 15.17 | 11.11 | 9.65 | 8.43 | 7.38 | 7.22 | 6.55 | 5.99 | 5.66 | 5.70 |
Interest coverage measures a company's ability to pay its interest expenses with its operating income. A higher ratio indicates stronger financial health and lower risk of default on interest payments.
Looking at the trend for LKQ Corp's interest coverage ratio over the past eight quarters, we observe a consistent increase, indicating a strengthening ability to cover interest expenses. The interest coverage ratio has been consistently above 6.0, which is generally considered a healthy level.
The ratio has shown an upward trend from 6.71 in Q4 2023 to 14.78 in Q1 2023, demonstrating a substantial improvement in the company's ability to meet its interest obligations. The peak in Q1 2023 at 14.78 reflects a particularly strong performance, with each dollar of interest expense being covered over 14 times by operating income.
Overall, the consistent improvement in LKQ Corp's interest coverage ratio over the past eight quarters suggests a favorable financial position and a reduced risk of default on interest payments. This trend indicates a positive outlook for the company's ability to service its debt obligations in the future.