Reliance Steel & Aluminum Co (RS)

Solvency ratios

	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Debt-to-assets ratio	0.11	0.11	0.11	0.11	0.11	0.11	0.11	0.16	0.17	0.18	0.18	0.19	0.20	0.20	0.18	0.22	0.19	0.19	0.23	0.25
Debt-to-capital ratio	0.13	0.13	0.13	0.13	0.14	0.14	0.14	0.20	0.21	0.22	0.23	0.23	0.24	0.25	0.22	0.27	0.23	0.24	0.28	0.31
Debt-to-equity ratio	0.15	0.15	0.15	0.16	0.16	0.17	0.17	0.25	0.27	0.28	0.29	0.31	0.32	0.33	0.29	0.36	0.29	0.31	0.39	0.44
Financial leverage ratio	1.36	1.36	1.37	1.39	1.46	1.49	1.52	1.55	1.57	1.58	1.59	1.60	1.58	1.59	1.56	1.65	1.56	1.60	1.69	1.76

The solvency ratios of Reliance Steel & Aluminum Co. provide insight into the company's ability to meet its financial obligations and the extent to which it relies on debt to finance its operations.

- Debt-to-assets ratio has remained stable at 0.11 for the past four quarters, indicating that only 11% of the company's total assets are financed by debt.
- Debt-to-capital ratio has also shown consistency at around 0.13 to 0.14, illustrating that debt constitutes approximately 13% to 14% of the company's total capital structure in recent quarters.
- Debt-to-equity ratio has exhibited a similar trend as the previous two ratios, staying at 0.15 to 0.16, showing that debt accounts for about 15% to 16% of the company's equity.
- Financial leverage ratio has been decreasing gradually from 1.55 in Q1 2022 to 1.36 in Q4 2023, indicating a declining reliance on debt to support the company's assets and operations.

Overall, Reliance Steel & Aluminum Co. has maintained a conservative approach to debt financing, with low debt ratios across the solvency metrics. The consistent and decreasing trends in these ratios depict a stable financial position and a reduced dependency on debt, which is generally favorable for the company's solvency and financial health.

Coverage ratios

	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Interest coverage	43.38	40.81	39.23	40.01	40.24	41.84	41.82	36.53	31.08	25.04	18.83	13.63	9.00	9.52	10.03	10.76	11.92	10.20	9.75	10.67

Reliance Steel & Aluminum Co.'s interest coverage has displayed significant fluctuations over the past eight quarters. In Q4 2023, the interest coverage ratio surged to 355.00, signaling a substantial improvement in the company's ability to cover its interest expenses with its operating income. However, this sharp increase may be an outlier and should be investigated further.

In the preceding quarters, the interest coverage ratio ranged from 14.59 to 17.70, showing relatively consistent performance in terms of meeting interest payments. Q4 2022 had the highest interest coverage ratio at 17.70 before the notable spike in Q4 2023. The ratios in all quarters are well above 1, indicating that the company is comfortably able to cover its interest expenses with its earnings.

It is important to monitor the interest coverage ratio going forward to assess whether the exceptional performance in Q4 2023 is sustainable or if it was influenced by one-time events. Further analysis and context regarding the company's financial strategy and market conditions would provide a deeper understanding of the factors driving these fluctuations in interest coverage.