LKQ Corporation (LKQ)
Solvency ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 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 | 2.49 | 2.48 | 2.48 | 2.48 | 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 |
Based on the provided data for LKQ Corporation's solvency ratios, it is evident that the company maintains a strong financial position with consistently low levels of debt in relation to its assets, capital, and equity.
1. Debt-to-assets ratio: The debt-to-assets ratio has consistently remained at 0.00 over the past few years, indicating that the company does not rely heavily on debt to finance its assets. This implies a low financial risk associated with the company's asset base.
2. Debt-to-capital ratio: Similar to the debt-to-assets ratio, the debt-to-capital ratio has also remained at 0.00 for all the reported periods. This suggests that the company's capital structure is not heavily leveraged with debt, further enhancing its solvency position.
3. Debt-to-equity ratio: With a consistent debt-to-equity ratio of 0.00 across all periods, LKQ Corporation shows that it has not utilized significant debt financing relative to equity. This indicates a balanced capital structure and a reduced risk of financial distress due to excessive debt levels.
4. Financial leverage ratio: The financial leverage ratio has fluctuated slightly over the years, but generally, it has remained within a reasonable range. The ratio peaked at 2.55 in September 30, 2023, but later stabilized around 2.4 in the subsequent periods. This suggests that the company has a moderate level of financial leverage, which is not excessively high.
Overall, LKQ Corporation's solvency ratios reflect a conservative approach to managing its financial obligations and a commitment to maintaining a healthy balance between debt and equity. This indicates a strong financial foundation and prudent financial management practices within the company.
Coverage ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 4.98 | 5.08 | 5.23 | 5.66 | 6.66 | 8.11 | 11.05 | 16.69 | 21.24 | 24.86 | 25.64 | 23.43 | 20.48 | 17.80 | 15.04 | 11.28 | 9.73 | 8.65 | 7.70 | 7.77 |
The interest coverage ratio measures a company's ability to pay its interest expenses on outstanding debt. A higher interest coverage ratio indicates that the company is more capable of meeting its interest obligations from its operating income.
Looking at the trend in LKQ Corporation's interest coverage ratio from March 31, 2020, to December 31, 2024, we observe the following:
- The interest coverage ratio has generally shown a positive trend over the period, starting at 7.77 on March 31, 2020, and reaching a peak of 25.64 on June 30, 2022.
- The company's interest coverage ratio improved steadily, reflecting its ability to generate sufficient operating income to cover its interest expenses comfortably.
- However, there was a slight decline in the interest coverage ratio from June 30, 2022, to December 31, 2024, indicating a potential decrease in the company's ability to cover its interest payments.
Overall, LKQ Corporation's interest coverage ratio demonstrates a healthy financial position with a generally upward trend, although the recent slight decline may warrant further monitoring to ensure the company can continue meeting its interest obligations effectively.