Meritage Corporation (MTH)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 1.38 | 1.46 | 1.58 | 1.65 | 1.72 |
The solvency ratios of Meritage Homes Corp. demonstrate an improving trend over the past five years. The debt-to-assets ratio, which measures the proportion of assets financed by debt, has declined from 0.30 in 2019 to 0.16 in 2023, indicating a reduction in financial leverage and increased asset coverage by equity.
Similarly, the debt-to-capital ratio, representing the percentage of capital that is funded by debt, decreased from 0.34 in 2019 to 0.18 in 2023, reflecting a positive shift towards a more equity-based capital structure.
The debt-to-equity ratio, indicating the amount of debt for every dollar of equity, showed a consistent decline from 0.52 in 2019 to 0.22 in 2023, suggesting a strengthening financial position with lower reliance on debt financing.
Lastly, the financial leverage ratio, which reflects the extent of asset financing through debt, has decreased steadily from 1.72 in 2019 to 1.38 in 2023, signifying a decreasing level of financial risk and a more stable financial structure for the company.
Overall, the solvency ratios of Meritage Homes Corp. have shown a positive trend, with a decreasing dependency on debt financing and an improvement in the company's ability to cover its obligations using its own equity.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | — | 31,447.80 | 3,003.62 | 246.09 | 37.19 |
The interest coverage ratio for Meritage Homes Corp. has shown a significant improvement over the past five years. In 2019 and 2020, the company had relatively low interest coverage ratios of 36.72 and 243.03, respectively. However, there was a substantial increase in the interest coverage ratio to 3,045.52 in 2021, demonstrating a strengthened ability to cover its interest expenses. This improvement continued in 2022, with a notable interest coverage ratio of 31,381.46, indicating a robust capacity to meet its interest obligations with operating income. The lack of data for 2023 prevents a direct comparison, but based on the trend observed from 2019 to 2022, it suggests that Meritage Homes Corp. has been operating with a significantly enhanced ability to cover its interest expenses.