Insperity Inc (NSP)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.14 | 0.17 | 0.18 | 0.21 | 0.23 |
| Debt-to-capital ratio | 0.79 | 0.80 | 0.82 | 1.00 | 0.89 |
| Debt-to-equity ratio | 3.80 | 3.93 | 4.56 | — | 8.37 |
| Financial leverage ratio | 26.77 | 22.55 | 25.18 | — | 35.90 |
Insperity Inc's solvency ratios indicate a favorable trend over the years, reflecting the company's ability to meet its long-term financial obligations. The Debt-to-assets ratio has decreased from 0.23 in 2020 to 0.14 in 2024, indicating a lower reliance on debt to finance its assets.
Similarly, the Debt-to-capital ratio declined from 0.89 in 2020 to 0.79 in 2024, suggesting that the company's reliance on debt relative to its total capital has decreased. This trend is positive as it indicates a stronger financial position and less financial risk.
The Debt-to-equity ratio also improved significantly from 8.37 in 2020 to 3.80 in 2024. The decreasing trend demonstrates that the company has reduced its debt levels relative to its equity, which is a sign of improved financial stability and lower financial risk.
Furthermore, the Financial leverage ratio saw a notable decline from 35.90 in 2020 to 26.77 in 2024. This indicates that the company has been able to decrease its financial leverage over the years, which is generally seen as a positive sign of financial health and stability.
Overall, based on these solvency ratios, Insperity Inc appears to have strengthened its financial position, reduced its reliance on debt, and improved its ability to meet its long-term obligations.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 5.50 | 9.34 | 18.27 | 23.57 | 24.61 |
Insperity Inc's interest coverage has shown a declining trend over the past five years. At the end of December 31, 2020, the interest coverage stood at 24.61, indicating the company had more than enough earnings to cover its interest expenses. However, the ratio decreased to 23.57 by December 31, 2021, and further dropped to 18.27 by December 31, 2022. This suggests that the company's ability to cover its interest payments weakened during this period.
By December 31, 2023, the interest coverage ratio fell significantly to 9.34, raising concerns about the company's ability to meet its interest obligations with its earnings. Moreover, as of December 31, 2024, the ratio decreased further to 5.50, indicating a substantial decrease in the company's ability to cover its interest expenses from operating income.
Overall, the declining trend in Insperity Inc's interest coverage ratio raises red flags regarding the company's financial health and its increasing risk of potential financial distress due to challenges in meeting its interest obligations with its operating income.