Ryder System Inc (R)
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 | 0.02 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.08 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.09 |
| Financial leverage ratio | 5.14 | 4.90 | 4.94 | 5.73 | 5.85 |
The solvency ratios of Ryder System, Inc. indicate the company's ability to meet its long-term debt obligations.
1. Debt-to-assets ratio:
The trend of the debt-to-assets ratio has been declining from 0.55 in 2019 to 0.45 in 2023, indicating that the company has been decreasing its reliance on debt to finance its assets, which is a positive sign for solvency.
2. Debt-to-capital ratio:
The debt-to-capital ratio has shown a relatively stable pattern, hovering around 0.70 during the past few years. This ratio indicates that 70% of the company's capital structure is funded by debt, while the remaining 30% is funded by equity.
3. Debt-to-equity ratio:
The trend of the debt-to-equity ratio has been decreasing since 2019, going from 3.20 to 2.32 in 2023. This suggests that the company has been reducing its dependency on debt in relation to equity, which is a favorable indication for solvency.
4. Financial leverage ratio:
The financial leverage ratio, which measures the extent of financial leverage in the company's capital structure, has shown a downward trend from 5.85 in 2019 to 5.14 in 2023. A declining trend in this ratio implies that the company is relying less on debt to finance its operations, enhancing its solvency position.
Overall, the declining trends in the debt-to-assets, debt-to-equity, and financial leverage ratios indicate that Ryder System, Inc. has been improving its solvency and reducing its reliance on debt financing, which is a positive signal for the company's long-term financial health and ability to meet its debt obligations.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 3.09 | 6.35 | 4.22 | 0.46 | 0.82 |
The interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt. A higher ratio indicates a stronger ability to cover interest expenses with operating income.
Analyzing Ryder System, Inc.'s interest coverage ratio over the past five years, we observe the following trends:
- In 2023, the interest coverage ratio was 3.63, indicating that the company generated operating income 3.63 times greater than its interest expenses. This is a decrease from the previous year.
- In 2022, the interest coverage ratio improved significantly to 6.25, suggesting a substantial improvement in the company's ability to cover interest costs.
- In 2021, the interest coverage ratio was 4.08, indicating a solid ability to cover interest expenses, although slightly lower than the previous year.
- In 2020, the interest coverage ratio was 0.88, which raises concerns as the ratio was below 1, implying that operating income was insufficient to cover interest payments.
- In 2019, the interest coverage ratio was 1.66, still below the ideal level of 2 or higher, indicating some vulnerability in meeting interest obligations.
Overall, while Ryder System, Inc. showed fluctuations in its interest coverage ratio over the past five years, it has generally demonstrated an ability to cover interest expenses with operating income. However, the significant drop in 2020 highlights the importance of monitoring this ratio for financial health and stability.