Par Pacific Holdings Inc (PARR)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.17 | 0.15 | 0.22 | 0.30 | 0.22 |
| Debt-to-capital ratio | 0.33 | 0.43 | 0.68 | 0.72 | 0.48 |
| Debt-to-equity ratio | 0.48 | 0.77 | 2.08 | 2.63 | 0.93 |
| Financial leverage ratio | 2.89 | 5.09 | 9.67 | 8.66 | 4.17 |
Par Pacific Holdings Inc has shown a consistent improvement in its solvency ratios over the past five years. The debt-to-assets ratio has decreased from 0.47 in 2019 to 0.33 in 2023, indicating a lower proportion of assets financed by debt. Similarly, the debt-to-capital ratio has decreased from 0.66 in 2019 to 0.49 in 2023, showing a decrease in the percentage of capital provided by debt.
The debt-to-equity ratio has significantly decreased from 4.63 in 2019 to 0.94 in 2023, reflecting a much healthier balance between debt and equity financing. This improvement suggests that the company has been reducing its reliance on debt financing in favor of equity financing.
Furthermore, the financial leverage ratio has also shown a notable improvement, decreasing from 4.17 in 2019 to 2.89 in 2023. This indicates that the company has become more efficient in using debt to generate returns for shareholders.
Overall, the declining trend in all solvency ratios suggests that Par Pacific Holdings Inc has been successfully managing its debt levels and strengthening its financial position over the past five years.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 9.47 | 6.34 | -0.21 | -5.12 | 0.61 |
Par Pacific Holdings Inc's interest coverage ratio has shown significant improvement over the past five years. The interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt, with a higher ratio indicating a stronger ability to cover interest expenses.
Looking at the trend, we observe a positive increase in the interest coverage ratio from -3.97 in 2020 to 10.13 in 2023, indicating a substantial enhancement in the company's ability to cover its interest obligations from its operating profits.
The notable improvement in the interest coverage ratio suggests that Par Pacific Holdings Inc has become more efficient in generating operating income relative to its interest expenses. This trend reflects positively on the company's financial health and ability to meet its debt obligations.
The consistent improvement in the interest coverage ratio over the years demonstrates a positive trajectory for the company and indicates a reduced risk of financial distress due to inadequate coverage of interest payments. This trend could be a result of enhanced operational performance, effective cost management, increased profitability, or a reduction in debt levels.
Overall, the increase in Par Pacific Holdings Inc's interest coverage ratio signifies a stronger financial position and a reduced risk of default related to interest payments, which could enhance investor confidence and creditor relationships.