Martin Marietta Materials Inc (MLM)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.26 | 0.29 | 0.35 | 0.25 | 0.24 |
| Debt-to-capital ratio | 0.33 | 0.38 | 0.44 | 0.31 | 0.31 |
| Debt-to-equity ratio | 0.49 | 0.61 | 0.78 | 0.45 | 0.45 |
| Financial leverage ratio | 1.88 | 2.09 | 2.20 | 1.80 | 1.89 |
Looking at Martin Marietta Materials, Inc.'s solvency ratios over the past five years, we can observe a trend of improving solvency and financial leverage indicators.
The debt-to-assets ratio has decreased from 0.35 in 2021 to 0.29 in 2023, indicating that the company is relying less on debt to finance its assets. This trend suggests that the company has been able to strengthen its financial position by reducing its debt relative to its total assets.
Similarly, the debt-to-capital ratio has also shown improvement, decreasing from 0.44 in 2021 to 0.35 in 2023. This ratio indicates the proportion of financing that comes from debt, with a lower ratio suggesting a lower reliance on debt for capital funding.
The debt-to-equity ratio has also displayed a favorable trend, decreasing from 0.78 in 2021 to 0.54 in 2023. A decreasing debt-to-equity ratio indicates that the company has been decreasing its debt relative to its equity, which can signal lower financial risk and improved solvency.
The financial leverage ratio, which measures the extent to which the company is using debt to finance its operations, has also shown improvement. The ratio has decreased from 2.20 in 2021 to 1.88 in 2023, indicating that the company is relying less on debt financing compared to equity financing.
Overall, these solvency ratios suggest that Martin Marietta Materials, Inc. has been managing its debt levels effectively and improving its financial health over the past few years. The downward trend in these ratios reflects positively on the company's ability to meet its financial obligations and indicates a stronger financial position.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 9.84 | 7.52 | 7.00 | 8.53 | 6.79 |
The interest coverage ratio of Martin Marietta Materials, Inc. has shown a generally positive trend over the past five years, indicating the company's ability to meet its interest obligations comfortably. The ratio has improved from 6.85 in 2019 to 9.73 in 2023. This indicates that the company's operating income is nearly 9.73 times its interest expense in 2023, implying a strong ability to cover its interest payments.
The consistent increase in the interest coverage ratio signifies that Martin Marietta Materials, Inc. has been effectively managing its interest expenses relative to its operating income. This trend suggests that the company's financial health has been strengthening over the years, as higher interest coverage ratios are typically perceived positively by investors and creditors.
An interest coverage ratio above 1 indicates that the company is generating enough operating income to cover its interest expenses. With the ratios consistently above 1 and trending upwards, Martin Marietta Materials, Inc. appears to have a solid capacity to meet its interest obligations. This not only reflects positively on the company's ability to service its debt but also enhances its creditworthiness in the eyes of potential lenders or bondholders.