Quanta Services Inc (PWR)
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 | 2.55 | 2.59 | 2.50 | 2.51 | 1.93 |
Quanta Services Inc has consistently maintained a strong position in terms of solvency ratios over the years, as indicated by its debt-to-assets ratio, debt-to-capital ratio, and debt-to-equity ratio, all of which remain at 0.00 as of December 31 in the years presented. A debt-to-assets ratio of 0.00 signifies that the company has no debt in relation to its total assets, indicating a minimal financial risk associated with debt obligations.
Similarly, the debt-to-capital and debt-to-equity ratios of 0.00 suggest that the company's capital structure is predominantly composed of equity rather than debt, reflecting a conservative approach to financing its operations. This is generally viewed positively by stakeholders, as it implies lower financial risk and greater financial stability.
Furthermore, the financial leverage ratio, which measures the company's reliance on debt financing, has been relatively stable over the years, ranging from 1.93 to 2.59. While a financial leverage ratio above 1 indicates that the company has more debt than equity in its capital structure, the ratios presented are within a reasonable range, suggesting a balanced approach to leveraging that does not pose a significant risk to the company's financial health.
In conclusion, based on the solvency ratios provided, Quanta Services Inc appears to have a strong and healthy financial position with minimal debt obligations and a prudent capital structure, indicating a solid foundation for long-term financial sustainability.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 6.98 | 6.19 | 6.74 | 9.17 | 13.53 |
Based on the provided data, we observe a declining trend in Quanta Services Inc's interest coverage ratio over the past five years. The interest coverage ratio measures a company's ability to meet its interest obligations from its operating income.
In December 2020, the interest coverage ratio was 13.53, indicating that the company generated 13.53 times more operating income than the interest expenses. However, this ratio decreased to 9.17 by December 2021, suggesting a slight deterioration in the company's ability to cover its interest payments.
The trend continued to decline in the subsequent years, with the interest coverage ratios dropping to 6.74 in December 2022, 6.19 in December 2023, and then slightly increasing to 6.98 by December 2024. These declining numbers indicate a weakening ability of Quanta Services Inc to comfortably cover its interest obligations over time.
A declining interest coverage ratio could signify potential financial risk associated with higher levels of debt or decreasing operating income relative to interest expenses. It is crucial for investors and stakeholders to monitor this ratio to assess the company's financial health and ability to service its debt efficiently.