Penske Automotive Group Inc (PAG)
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 | 0.09 | 0.10 | 0.11 | 0.11 | 0.11 | 0.11 | 0.10 | 0.10 | 0.10 | 0.11 | 0.11 | 0.11 | 0.12 | 0.17 | 0.16 | 0.18 | 0.16 | 0.17 | 0.16 | 0.16 |
| Debt-to-capital ratio | 0.23 | 0.25 | 0.27 | 0.27 | 0.27 | 0.28 | 0.25 | 0.25 | 0.25 | 0.26 | 0.28 | 0.30 | 0.33 | 0.42 | 0.43 | 0.48 | 0.45 | 0.46 | 0.45 | 0.45 |
| Debt-to-equity ratio | 0.30 | 0.34 | 0.37 | 0.37 | 0.37 | 0.38 | 0.34 | 0.33 | 0.34 | 0.35 | 0.38 | 0.43 | 0.49 | 0.72 | 0.74 | 0.94 | 0.81 | 0.86 | 0.81 | 0.80 |
| Financial leverage ratio | 3.32 | 3.27 | 3.38 | 3.33 | 3.40 | 3.34 | 3.22 | 3.30 | 3.31 | 3.31 | 3.56 | 3.82 | 4.01 | 4.25 | 4.67 | 5.14 | 4.99 | 5.19 | 5.06 | 5.14 |
Penske Automotive Group Inc's solvency ratios provide insights into the company's ability to meet its long-term debt obligations and the extent to which it relies on debt financing. Here is a detailed analysis of the solvency ratios based on the data provided:
1. Debt-to-assets ratio: The trend of Penske Automotive's debt-to-assets ratio has remained relatively stable around 0.32 to 0.34 over the past eight quarters. This indicates that, on average, about 32% to 34% of the company's total assets are financed by debt. The consistent level suggests that Penske Automotive has effectively managed its debt levels in relation to its total assets.
2. Debt-to-capital ratio: Penske Automotive's debt-to-capital ratio has also shown stability, ranging from 0.51 to 0.53 over the same period. This ratio reflects the proportion of capital contributed by debt to the company's total capital structure. The consistent levels indicate a moderate reliance on debt for financing the company's operations.
3. Debt-to-equity ratio: The debt-to-equity ratio of Penske Automotive has fluctuated between 1.04 and 1.14 over the past two years. This ratio signifies the extent to which the company's assets are funded by debt relative to shareholders' equity. The variation in this ratio indicates some fluctuations in the capital structure, with higher levels indicating higher debt reliance.
4. Financial leverage ratio: Penske Automotive's financial leverage ratio, which measures the company's total assets compared to shareholders' equity, has shown some variability, ranging from 3.22 to 3.40. A higher financial leverage ratio indicates higher financial risk, as the company has a higher level of debt to support its assets.
In summary, Penske Automotive Group Inc has maintained relatively stable solvency ratios over the past eight quarters, indicating a balanced approach to debt management and capital structure. The company has demonstrated a moderate reliance on debt financing, with fluctuations in certain ratios reflecting potential changes in its capital structure and financial risk profile.
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 | 14.60 | 16.06 | 17.74 | 19.54 | 21.13 | 22.79 | 23.62 | 20.49 | 15.77 | 11.42 | 8.74 | 5.68 | 4.25 | 3.42 | 2.56 | 2.91 | 3.13 | 3.07 | 3.13 | 3.26 |
Penske Automotive Group Inc's interest coverage ratio has demonstrated a consistent downward trend over the eight quarters analyzed, indicating a decreasing ability of the company to cover its interest expenses with its operating income. The interest coverage ratios have ranged from 7.47 in Q4 2023 to 22.21 in Q2 2022. A higher interest coverage ratio is generally preferred as it signifies a healthier financial position and lower risk of default.
The decreasing trend observed in Penske Automotive Group Inc's interest coverage suggests that the company's operating income may be insufficient to comfortably cover its interest obligations. This could potentially be a cause for concern for investors and creditors, as a declining interest coverage ratio may signal financial distress and an increased risk of default.
It would be crucial for Penske Automotive Group Inc to closely monitor its interest coverage ratio and take proactive measures to improve it, such as increasing operating income or reducing debt levels. Addressing the declining trend in interest coverage would be essential in maintaining the company's financial stability and credibility in the eyes of stakeholders.