Norfolk Southern Corporation (NSC)
Solvency ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 3.26 | 3.23 | 3.11 | 3.08 | 3.05 | 3.02 | 2.99 | 2.92 | 2.82 | 2.78 | 2.71 | 2.59 | 2.57 | 2.56 | 2.55 | 2.52 | 2.50 | 2.46 | 2.43 | 2.42 |
Solvency ratios provide insight into Norfolk Southern Corp.'s ability to meet its long-term financial obligations. The debt-to-assets ratio remained relatively stable between 0.38 and 0.41 throughout 2022 and 2023, indicating that the company's total debt level compared to its total assets has been consistent.
The debt-to-capital ratio, which measures the proportion of debt in the company's capital structure, also remained relatively steady, ranging from 0.52 to 0.57 over the same period. This suggests that Norfolk Southern has maintained a consistent level of debt relative to its total capital.
The debt-to-equity ratio, reflecting the extent to which debt is used to finance the company's operations compared to equity, showed a slight upward trend from 1.10 in Q1 2022 to 1.34 in Q4 2023. This indicates an increasing reliance on debt for financing.
The financial leverage ratio, which measures the extent to which the company is using debt to finance its operations, increased from 2.92 in Q1 2022 to 3.26 in Q4 2023. This indicates a higher level of financial risk as Norfolk Southern is employing more debt in its capital structure.
Overall, while Norfolk Southern Corp. has maintained relatively stable debt-to-assets and debt-to-capital ratios, the increase in the debt-to-equity and financial leverage ratios suggests a growing reliance on debt for financing, potentially indicating increased financial risk for the company in the long term.
Coverage ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 4.21 | 4.85 | 5.56 | 6.45 | 6.97 | 7.00 | 6.95 | 6.96 | 7.00 | 6.87 | 6.53 | 5.72 | 5.05 | 5.04 | 5.31 | 6.03 | 6.78 | 6.99 | 7.14 | 7.36 |
The interest coverage ratio for Norfolk Southern Corp. has remained stable over the past eight quarters, ranging from 5.49 to 7.00. This indicates the company's ability to meet its interest obligations with its earnings before interest and taxes (EBIT).
The consistently high interest coverage ratios above 5.0 suggest that Norfolk Southern Corp. has a healthy cushion to cover its interest expenses. A ratio above 1.0 indicates that the company generates enough operating income to cover its interest payments, with higher ratios indicating a lower financial risk.
The slight fluctuation in the interest coverage ratio over the quarters may be attributed to changes in the company's EBIT and interest expenses. Overall, the trend suggests that Norfolk Southern Corp. has been effectively managing its interest obligations and maintaining a strong financial position during this period.
See also:
Norfolk Southern Corporation Solvency Ratios (Quarterly Data)