Grand Canyon Education Inc (LOPE)
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 | 0.04 | 0.04 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.05 | 0.05 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.05 | 0.05 |
| Financial leverage ratio | 1.30 | 1.30 | 1.31 | 1.17 | 1.17 |
Based on the provided data, the solvency ratios of Grand Canyon Education Inc are as follows:
1. Debt-to-assets ratio:
- The debt-to-assets ratio remained stable at 0.04 from December 31, 2020, to December 31, 2021, and decreased significantly to 0.00 from December 31, 2022, onwards. This indicates that the company has a low level of debt relative to its total assets, which is a positive indicator of financial stability.
2. Debt-to-capital ratio:
- Similar to the debt-to-assets ratio, the debt-to-capital ratio was 0.05 for the years 2020 and 2021, and then decreased to 0.00 from December 31, 2022, onwards. This ratio also suggests a low level of debt in comparison to the company's total capital structure.
3. Debt-to-equity ratio:
- The debt-to-equity ratio mirrored the trend of the debt-to-assets and debt-to-capital ratios, remaining at 0.05 for 2020 and 2021, and then dropping to 0.00 from December 31, 2022, onwards. This indicates that the company's reliance on debt financing relative to its equity has decreased significantly.
4. Financial leverage ratio:
- The financial leverage ratio slightly increased from 1.17 in 2020 and 2021 to 1.31 in 2022, and then remained stable at 1.30 from December 31, 2023, onwards. This shows that the company's use of leverage to finance its operations has been relatively consistent and within a manageable range.
Overall, the solvency ratios of Grand Canyon Education Inc demonstrate a strong financial position with very low debt levels relative to its assets, capital, and equity. The stability and decreasing trend in these ratios reflect a solid solvency position and suggest that the company has efficiently managed its debt obligations over the years.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 68,849.75 | 7,869.94 | 120,060.50 | 93.00 | 76.68 |
Based on the provided data, Grand Canyon Education Inc's interest coverage ratio has shown significant fluctuations over the years. The interest coverage ratio measures the company's ability to meet its interest payments on outstanding debt.
As of December 31, 2020, the interest coverage ratio was 76.68, indicating that the company was able to cover its interest expenses approximately 76 times over with its operating income. This suggests a strong capacity to meet interest obligations at that time.
By December 31, 2021, the interest coverage ratio had improved to 93.00, reflecting an even stronger ability to cover interest payments. This trend continued into December 31, 2022, where the interest coverage ratio spiked to an unusually high value of 120,060.50. Such a dramatic increase could be due to various factors like a significant increase in operating income or a decrease in interest expenses.
However, by December 31, 2023, the interest coverage ratio dropped to 7,869.94, signaling a potential decline in the company's ability to cover its interest payments comfortably. This substantial decrease in the ratio could raise concerns about the company's financial health and ability to service its debt obligations.
Subsequently, by December 31, 2024, the interest coverage ratio improved to 68,849.75, although it remained below the levels seen in the earlier years. It's important for stakeholders to monitor this ratio closely to ensure Grand Canyon Education Inc maintains a healthy balance between its operating income and interest expenses to meet its debt obligations effectively.