Pool Corporation (POOL)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| 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 | 2.64 | 2.61 | 2.89 | 3.01 | 2.72 |
Pool Corporation demonstrates a strong solvency position as evidenced by its consistently low debt-to-assets, debt-to-capital, and debt-to-equity ratios, all of which stand at 0.00 across the years from 2020 to 2024. This indicates that the company relies very little on debt to finance its operations and investments, minimizing the risk associated with financial leverage.
However, the financial leverage ratio has fluctuated slightly over the same period, ranging from 2.61 to 3.01. Despite these fluctuations, the financial leverage ratio remains relatively stable and suggests that Pool Corporation primarily relies on equity financing to support its assets and operations. This stable and low level of financial leverage indicates a healthy mix of debt and equity financing, contributing to the company's overall solvency and financial stability.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 12.28 | 12.78 | 25.07 | 96.40 | 37.56 |
Pool Corporation's interest coverage ratio measures its ability to cover interest expenses with its operating income. Looking at the trend over the past five years, we observe a generally healthy interest coverage ratio. In December 2020, the ratio was 37.56, indicating strong earnings relative to interest expenses. By December 2021, the interest coverage improved significantly to 96.40, showing an even stronger ability to meet interest obligations.
However, in December 2022, there was a notable decline in the interest coverage ratio to 25.07, which may raise concerns about the company's ability to comfortably cover its interest charges with operating income. This trend continued in December 2023, with the interest coverage further decreasing to 12.78, indicating a potential strain on the company's ability to meet interest payments.
In the most recent year, December 2024, the interest coverage ratio remained low at 12.28, continuing the downward trend observed in the previous years. This suggests that Pool Corporation may be facing challenges in generating sufficient operating income to cover its interest expenses.
Overall, Pool Corporation's interest coverage ratio has shown variability in recent years, with a notable decline in the ability to cover interest expenses compared to earlier periods. It would be important for stakeholders to monitor this ratio closely to ensure the company's financial health and ability to meet its debt obligations.