MYR Group Inc (MYRG)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.02 | 0.03 | 0.00 | 0.03 | 0.16 |
| Debt-to-capital ratio | 0.04 | 0.06 | 0.01 | 0.06 | 0.30 |
| Debt-to-equity ratio | 0.04 | 0.06 | 0.01 | 0.06 | 0.43 |
| Financial leverage ratio | 2.42 | 2.50 | 2.16 | 2.32 | 2.77 |
Solvency ratios provide insights into a company's ability to meet its long-term financial obligations. Looking at MYR Group Inc's solvency ratios over the past five years, we can observe the following trends:
1. Debt-to-assets ratio: This ratio indicates the proportion of a company's assets that are financed through debt. MYR Group Inc has maintained a relatively low debt-to-assets ratio over the years, with a slight increase in 2022 and a peak in 2019. The decreasing trend from 2019 to 2023 suggests improved asset coverage by equity.
2. Debt-to-capital ratio: This ratio measures the percentage of a company's capital that is financed through debt. MYR Group Inc's debt-to-capital ratio has also been relatively low, showing a similar trend to the debt-to-assets ratio. The company has effectively managed its capital structure by keeping debt at a moderate level.
3. Debt-to-equity ratio: The debt-to-equity ratio reflects the extent to which a company is relying on debt to finance its operations compared to equity. MYR Group Inc has maintained a stable and low debt-to-equity ratio, indicating a conservative debt usage approach. The decrease in this ratio over the years demonstrates a decreasing reliance on debt financing.
4. Financial leverage ratio: This ratio compares a company's total assets to its equity and provides an indication of the company's financial risk. MYR Group Inc's financial leverage ratio has shown a decreasing trend from 2019 to 2023, signifying a reduction in financial risk and enhanced equity cushioning.
Overall, based on the solvency ratios analysis, MYR Group Inc appears to have a healthy and conservative capital structure with a low level of debt relative to assets, capital, and equity. The decreasing trend in these ratios over the years suggests an improved financial position and reduced financial risk for the company.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 26.31 | 33.05 | 65.65 | 18.84 | 9.34 |
The interest coverage ratio of MYR Group Inc has exhibited fluctuations over the past five years. The ratio has generally been above 1, indicating that the company has generated enough operating income to cover its interest expenses.
In 2019, the interest coverage ratio was relatively low at 8.62, suggesting that the company's ability to cover interest obligations with operating income was weaker during that period. However, in the following years, the ratio improved significantly. By 2021, the interest coverage ratio surged to 66.78, indicating a substantial increase in the company's ability to meet its interest payments.
The trend continued positively in 2022 and 2023, with interest coverage ratios of 33.33 and 30.83, respectively. These figures demonstrate that MYR Group Inc's operating income remained robust enough to comfortably cover its interest expenses during these years.
Overall, the upward trend in the interest coverage ratio from 2019 to 2021 and the consistently strong ratios in the following years indicate that MYR Group Inc has been effectively managing its interest obligations relative to its operating income.