Planet Fitness Inc (PLNT)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.66 | 0.69 | 0.86 | 0.95 | 0.98 |
| Debt-to-capital ratio | 1.06 | 1.11 | 1.59 | 1.68 | 1.72 |
| Debt-to-equity ratio | — | — | — | — | — |
| Financial leverage ratio | — | — | — | — | — |
The solvency ratios of Planet Fitness Inc over the past five years indicate the company's ability to meet its long-term obligations. The debt-to-assets ratio has shown a decreasing trend, decreasing from 0.99 in 2019 to 0.67 in 2023, indicating a stronger ability to cover its debt obligations with its assets.
The debt-to-capital ratio has also decreased over the same period, falling from 1.71 in 2019 to 1.06 in 2023. This suggests that the company's reliance on debt to finance its operations has reduced, thereby improving its overall financial stability.
Notably, there is no data available for the debt-to-equity ratio and financial leverage ratio, which limits a comprehensive assessment of the company's solvency from these perspectives. However, based on the trend in the debt-to-assets and debt-to-capital ratios, it can be inferred that Planet Fitness Inc has been managing its debt levels effectively and enhancing its solvency position in recent years.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 3.27 | 2.69 | 1.60 | 0.83 | 3.55 |
The interest coverage ratio measures a company's ability to pay its interest expenses on outstanding debt. A higher ratio indicates that the company is more capable of meeting its interest obligations from its operating income.
Looking at the trend of Planet Fitness Inc's interest coverage ratio over the past five years, we observe the following:
- In 2023, the interest coverage ratio improved to 4.09, indicating that the company's operating income was able to cover its interest expenses more than four times. This suggests a strong ability to meet its debt obligations.
- In 2022, the interest coverage ratio was 2.81, showing a slight decrease from the previous year. While the ratio remained healthy, it did decrease compared to 2021.
- Moving back to 2021, the interest coverage ratio was 1.97, highlighting a moderate ability to cover interest payments with operating income.
- In 2020, the interest coverage ratio was 0.81, signaling a lower capacity to meet interest expenses from operating income. This could be a red flag indicating potential financial strain.
- The ratio improved significantly in 2019 to 4.37, indicating a strong ability to cover interest expenses that year.
Overall, it is evident that there have been fluctuations in Planet Fitness Inc's interest coverage ratio over the past five years, with 2023 showing a strong improvement, while 2020 was a challenging year in terms of covering interest payments. This analysis suggests that investors and stakeholders should continue to monitor this ratio closely to assess the company's financial health and ability to service its debt obligations.