Old Dominion Freight Line Inc (ODFL)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.01 | 0.01 | 0.02 | 0.02 | 0.02 |
| Debt-to-capital ratio | 0.01 | 0.02 | 0.02 | 0.03 | 0.03 |
| Debt-to-equity ratio | 0.01 | 0.02 | 0.03 | 0.03 | 0.03 |
| Financial leverage ratio | 1.29 | 1.29 | 1.32 | 1.31 | 1.31 |
Old Dominion Freight Line Inc has consistently maintained a low level of debt relative to its assets, capital, and equity over the years, as indicated by its Debt-to-assets, Debt-to-capital, and Debt-to-equity ratios. The Debt-to-assets ratio remained stable at around 0.02 from 2020 to 2023, before decreasing to 0.01 in 2024.
Similarly, the Debt-to-capital ratio also showed a downward trend from 0.03 in 2020 and 2021 to 0.01 in 2024. This suggests that the company relies less on debt financing in relation to its capital structure. The Debt-to-equity ratio followed a similar pattern, decreasing from 0.03 in 2020 and 2021 to 0.01 in 2024, indicating a declining level of financial leverage.
Overall, the Financial leverage ratio, which gives an overview of the company's financial risk, remained relatively stable between 1.29 and 1.32 over the years. This ratio suggests that Old Dominion Freight Line Inc maintains a conservative capital structure and is not heavily reliant on debt to fund its operations. This prudent approach to managing debt indicates the company's strong solvency position and ability to meet its financial obligations efficiently.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 7,283.02 | 3,535.93 | 1,177.63 | 805.79 | 325.98 |
Old Dominion Freight Line Inc's interest coverage has shown a consistent and impressive improvement over the years, reflecting the company's strong ability to meet its interest payment obligations. The interest coverage ratio has significantly increased from 325.98 as of December 31, 2020, to 7,283.02 as of December 31, 2024. This upward trend signifies a robust financial position, as the company's operating income is more than sufficient to cover its interest expenses.
The substantial rise in the interest coverage ratio indicates that Old Dominion Freight Line Inc has a healthy financial standing and a low risk of defaulting on its debt obligations. This trend suggests that the company's profitability and cash flow generation have improved significantly over the years, providing a solid buffer to cover interest payments. Investors and creditors may view this strong interest coverage positively, as it demonstrates the company's ability to manage its debt effectively and suggests a lower risk of financial distress.