Norfolk Southern Corporation (NSC)
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 | 0.00 | 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 | 3.05 | 3.26 | 3.05 | 2.82 | 2.57 |
Norfolk Southern Corporation has consistently maintained a strong solvency position, as indicated by its consistently low debt-to-assets, debt-to-capital, and debt-to-equity ratios of 0.00 over the years 2020 to 2024. These ratios suggest that the company has very little debt relative to its assets, capital, and equity, reflecting a conservative approach to leverage.
On the other hand, the financial leverage ratio of Norfolk Southern has shown an increasing trend from 2.57 in 2020 to 3.05 in 2022, before declining to 3.05 in 2024. This indicates that the company has been relying more on debt financing to support its operations and growth during this period.
Overall, while Norfolk Southern Corporation's debt levels have been minimal in relation to its assets, capital, and equity, the increasing trend in the financial leverage ratio signals a slight uptick in the company's reliance on debt, which should be monitored to ensure it remains within manageable levels for sustainable growth and financial stability.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 5.13 | 4.21 | 6.97 | 7.00 | 5.05 |
Based on the interest coverage ratios provided for Norfolk Southern Corporation for the years 2020 to 2024, the company's ability to meet its interest obligations has varied. In December 2020, the interest coverage ratio was 5.05, indicating that the company generated operating income more than five times its interest expenses, reflecting a moderate level of financial health.
Over the following years, the interest coverage improved to 7.00 in December 2021 and 6.97 in December 2022, showing a strengthening ability to cover interest payments with operating income. However, there was a decline in the interest coverage ratio to 4.21 in December 2023, suggesting a potential strain on the company's ability to meet interest obligations during that period.
In December 2024, the interest coverage ratio recovered slightly to 5.13, indicating a modest improvement compared to 2023 but still below the levels seen in 2021 and 2022. Overall, the trend in Norfolk Southern Corporation's interest coverage ratios suggests some variability in its ability to cover interest expenses, signaling the importance of monitoring the company's financial performance and managing its debt levels effectively.