MGM Resorts International (MGM)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.15 | 0.16 | 0.29 | 0.34 | 0.33 |
| Debt-to-capital ratio | 0.62 | 0.61 | 0.66 | 0.66 | 0.59 |
| Debt-to-equity ratio | 1.66 | 1.54 | 1.94 | 1.90 | 1.45 |
| Financial leverage ratio | 11.12 | 9.46 | 6.74 | 5.61 | 4.38 |
The solvency ratios of MGM Resorts International demonstrate an improving trend over the past five years. The debt-to-assets ratio has decreased steadily from 0.33 in 2019 to 0.15 in 2023, indicating that the company's reliance on debt to finance its assets has been declining, which is a positive sign for solvency. Similarly, the debt-to-capital ratio has also shown a decreasing trend, dropping from 0.59 in 2019 to 0.63 in 2023, implying that the company has been relying less on debt to fund its operations and capital investments.
The debt-to-equity ratio, which measures the proportion of debt to equity financing, has decreased from 1.45 in 2019 to 1.67 in 2023. This indicates that the company's level of debt relative to its equity has been reducing, which is generally favorable as it signifies a lower financial risk.
Furthermore, the financial leverage ratio has been increasing steadily from 4.38 in 2019 to 11.12 in 2023, indicating that the company's reliance on debt financing has been rising in relation to its equity. While a higher leverage ratio may indicate increased financial risk, it can also reflect potential growth opportunities and improved profitability.
In conclusion, MGM Resorts International's solvency ratios have shown an overall positive trend, with decreasing debt ratios and increasing leverage ratios. These improvements suggest a strengthening financial position and better ability to meet its financial obligations in the long term.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 3.82 | 4.65 | 2.89 | -0.81 | 4.16 |
MGM Resorts International's interest coverage ratio has fluctuated over the past five years. As of December 31, 2023, the interest coverage ratio stood at 3.30, indicating that the company's operating income was sufficient to cover its interest expenses. This reflects a positive trend compared to the significant negative ratios in 2022 and 2020, suggesting an improvement in the company's ability to meet its interest obligations from operating earnings. However, the ratio was lower in 2021 and 2019, indicating a tighter ability to cover interest expenses during those periods. Overall, MGM Resorts International's interest coverage ratio has shown variability, and it is important for stakeholders to monitor this ratio to assess the company's financial health and its ability to service its debt obligations.