PACCAR Inc (PCAR)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 2.57 | 2.53 | 2.55 | 2.70 | 2.92 |
Solvency ratios are crucial metrics that assess a company's ability to meet its long-term financial obligations. Let's analyze Paccar Inc.'s solvency ratios based on the data provided.
1. Debt-to-assets ratio:
- Paccar's debt-to-assets ratio has been relatively stable over the past five years, ranging from 0.35 in 2023 to 0.40 in 2019.
- A lower debt-to-assets ratio indicates that Paccar relies less on debt to finance its assets, which is generally viewed positively as it signifies a lower financial risk.
2. Debt-to-capital ratio:
- Paccar's debt-to-capital ratio also remained steady over the five-year period, ranging from 0.47 in 2023 to 0.54 in 2019.
- This ratio represents the proportion of the company's capital that is financed by debt, and a decreasing trend suggests improved financial stability.
3. Debt-to-equity ratio:
- Paccar's debt-to-equity ratio shows a declining trend from 1.16 in 2019 to 0.90 in 2023.
- A lower debt-to-equity ratio implies that the company is relying less on debt financing in relation to equity, indicating a stronger financial position.
4. Financial leverage ratio:
- Paccar's financial leverage ratio has also decreased consistently over the past five years, from 2.92 in 2019 to 2.57 in 2023.
- This ratio measures the company's reliance on debt to fund its operations, and a decreasing trend suggests a more conservative capital structure.
In conclusion, Paccar Inc.'s solvency ratios demonstrate a positive trajectory with decreasing levels of debt relative to assets, capital, equity, and overall financial leverage. This trend indicates an enhancement in the company's financial stability and ability to meet its long-term obligations.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 63.79 | — | — | 16,617.00 | 30,993.00 |
Based on the provided data, the interest coverage ratio for Paccar Inc. is not available for the years 2019 to 2023. This indicates that the company's ability to cover its interest payments using its operating income is not explicitly provided in the financial statements for those years. It is important to note that interest coverage is a key financial metric that helps assess a company's ability to meet interest obligations, and the absence of this data may limit a comprehensive evaluation of Paccar Inc.'s financial health and risk profile related to debt servicing. Further information or additional analysis is needed to fully evaluate the company's financial leverage and debt repayment capacity.