Penske Automotive Group Inc (PAG)

Penske Automotive Group Inc's solvency ratios indicate the company's ability to meet its long-term financial obligations. Looking at the trend over the past five years, the debt-to-assets ratio has been relatively stable, ranging from 0.30 to 0.46. This indicates that the company has been able to maintain a moderate level of debt compared to its total assets.

Similarly, the debt-to-capital ratio has also shown consistency, fluctuating between 0.50 and 0.70. This ratio provides insight into the proportion of the company's capital that is funded by debt, and Penske Automotive Group Inc has managed to keep this ratio within a reasonable range.

On the other hand, the debt-to-equity ratio has shown some variability over the years, ranging from 0.99 to 2.28. This suggests fluctuations in the amount of debt relative to shareholder equity. The higher values in 2019 and 2020 may indicate increased reliance on debt financing during those years, which has since been partly reduced.

Lastly, the financial leverage ratio, which reflects the company's level of financial risk, has also experienced fluctuation but generally trended downwards from 2019 to 2023. This ratio was highest in 2019 and has since decreased, indicating a decrease in the company's reliance on debt financing to support its operations.

Overall, Penske Automotive Group Inc's solvency ratios show a relatively stable and improving financial position in terms of its ability to meet its long-term obligations and manage financial risk. However, monitoring these ratios over time will be crucial to ensure continued financial stability and sustainability.

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Coverage ratios

The interest coverage ratio of Penske Automotive Group Inc has shown variability over the past five years. The ratio decreased from 3.83 in 2019 to 5.27 in 2020, indicating a temporary weakening in the company's ability to cover interest expenses with its earnings. However, in the following years, the interest coverage ratio improved significantly, reaching 18.26 in 2021 and 16.14 in 2022, reflecting a strong ability to meet interest obligations with operating income.

As of December 31, 2023, the interest coverage ratio stood at 7.47, which is lower than the previous two years but still indicates a healthy cushion to cover interest payments. A ratio above 1 implies that the company is generating enough operating income to comfortably meet its interest obligations. It is noteworthy that although the ratio has fluctuated, Penske Automotive Group Inc has generally maintained a sound financial position concerning its ability to service its debt through operational earnings.