Quanta Services Inc (PWR)
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 | 2.59 | 2.50 | 2.51 | 1.93 | 2.06 |
Quanta Services, Inc.'s solvency ratios indicate the company's ability to meet its long-term debt obligations and the extent to which it relies on debt financing. The trends observed over the past five years show a consistent improvement in the company's solvency position.
The debt-to-assets ratio, which measures the proportion of total assets financed by debt, has declined from 0.29 in 2021 to 0.26 in 2023, indicating that Quanta Services has reduced its reliance on debt to finance its assets.
Similarly, the debt-to-capital ratio, which assesses the percentage of capital structure funded by debt, has also decreased from 0.42 in 2021 to 0.40 in 2023. This suggests that the company has been successful in lowering its debt levels relative to its total capital.
The debt-to-equity ratio, a measure of financial leverage, has shown a declining trend from 0.73 in 2021 to 0.67 in 2023. This indicates that Quanta Services has been progressively reducing its dependence on equity financing in favor of debt.
The financial leverage ratio, which compares total assets to equity, has shown an increasing trend, reflecting Quanta Services' increasing reliance on debt financing compared to equity. However, the ratio remains at a manageable level, indicating the company's ability to cover its debt obligations with the assets at its disposal.
Overall, the solvency ratios of Quanta Services, Inc. demonstrate a positive trajectory, with decreasing reliance on debt over the years, thereby enhancing the company's long-term financial stability and ability to weather economic uncertainties.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 6.16 | 6.50 | 9.95 | 13.55 | 9.48 |
Quanta Services, Inc.'s interest coverage ratio has experienced fluctuations over the past five years. The company's interest coverage ratio was 6.44 in 2023, indicating that the company generated enough operating income to cover its interest expenses 6.44 times. This was a decrease from the previous year when the ratio was 7.32.
Comparing the trend over the five-year period, the interest coverage ratio was highest in 2020 at 14.58, indicating the company was in a strong position to meet its interest obligations. This was followed by a significant decrease in 2021 to 10.29, before a further decline in 2022 and 2023.
Overall, the declining trend in Quanta Services, Inc.'s interest coverage ratio in recent years may raise concerns about the company's ability to cover its interest expenses from operating income. Further analysis of the company's financial health and operational efficiency is recommended to understand the factors influencing this ratio.