PACCAR Inc (PCAR)
Solvency ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 2.48 | 2.32 | 2.33 | 2.39 | 2.57 | 2.37 | 2.44 | 2.51 | 2.53 | 2.38 | 2.44 | 2.52 | 2.55 | 2.43 | 2.56 | 2.62 | 2.70 | 2.67 | 2.70 | 2.83 |
PACCAR Inc's solvency ratios indicate a very strong financial position with consistently low levels of debt relative to assets, capital, and equity over the years provided. The Debt-to-assets ratio, Debt-to-capital ratio, and Debt-to-equity ratio have all been consistently at 0.00, indicating that the company operates with minimal debt in relation to its total assets, capital, and equity.
The Financial Leverage ratio has shown a decreasing trend from 2.83 in March 2020 to 2.48 in December 2024. This ratio measures the extent to which the company finances its assets through debt. PACCAR's decreasing financial leverage ratio indicates a lower reliance on debt financing over the years, which is a positive signal for solvency and financial stability.
Overall, PACCAR's solvency ratios reflect a conservative financial strategy with a prudent approach to managing its debt levels, which contributes to its strong solvency position and overall financial health.
Coverage ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
The interest coverage ratio for PACCAR Inc as of the provided data indicates that the company's earnings are not currently sufficient to cover its interest expenses. This is demonstrated by the ratio being denoted as "—" for all the reported periods, signifying that the earnings before interest and taxes (EBIT) are insufficient to cover the interest obligations of the company.
A low or negative interest coverage ratio is a potential indicator of financial distress or a lack of earnings power to meet debt obligations. It suggests that PACCAR Inc may be facing challenges in generating enough operating income to cover its interest payments, which could raise concerns among investors and creditors regarding the company's ability to service its debt.
It is important for PACCAR Inc to improve its interest coverage ratio in order to demonstrate its financial stability and ability to meet its financial obligations. This could be achieved through strategies such as increasing profitability, reducing debt levels, or optimizing the company's capital structure to ensure sustainable and healthy financial performance in the long term.