Sunrun Inc (RUN)
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 | 7.79 | 3.91 | 2.87 | 2.64 | 2.37 |
Based on the provided data for Sunrun Inc, the solvency ratios paint a picture of a company with very low levels of debt relative to its assets, capital, and equity. The Debt-to-assets ratio, Debt-to-capital ratio, and Debt-to-equity ratio all show a consistent and stable trend of 0.00 over the five-year period from 2020 to 2024. This indicates that Sunrun Inc operates with minimal financial leverage and relies more on equity and capital rather than debt to finance its operations.
However, the Financial leverage ratio has shown an increasing trend from 2.37 in 2020 to 7.79 in 2024. This indicates that the company's reliance on debt has been increasing significantly over the years, with the ratio more than tripling by the end of the period. While Sunrun Inc still maintains a low level of debt relative to its assets, capital, and equity, the increasing financial leverage ratio suggests a growing reliance on debt financing, which could potentially increase the company's financial risk in the future.
Overall, Sunrun Inc appears to have a strong solvency position with very low debt levels, but the increasing trend in the financial leverage ratio raises concerns about the company's evolving capital structure and the potential risks associated with higher debt levels. It would be important for stakeholders to monitor this trend to ensure the company maintains a healthy balance between debt and equity in its capital structure.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | -4.17 | -3.05 | -0.90 | -2.03 | -2.04 |
The interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt. In the case of Sunrun Inc, the trend in the interest coverage ratio has shown a concerning decline over the years.
As of December 31, 2020, the interest coverage ratio was -2.04, indicating that Sunrun's operating income was not enough to cover its interest expenses by more than two times. This ratio further decreased to -2.03 by December 31, 2021, signaling a slight deterioration in the company's ability to cover its interest obligations.
By December 31, 2022, the interest coverage ratio dropped even more to -0.90, which implies that Sunrun's operating income was insufficient to cover its interest expenses. This significant decline in the ratio raises concerns about the company's financial health and its ability to service its debt obligations.
The trend continued to worsen as of December 31, 2023, with an interest coverage ratio of -3.05, indicating a further strain on Sunrun's ability to meet its interest payments. The most recent data available, as of December 31, 2024, shows the interest coverage ratio deteriorating to -4.17, reflecting a continued downward trend.
Overall, the declining trend in Sunrun Inc's interest coverage ratio over the years suggests a growing financial risk, as the company's operating income is increasingly insufficient to cover its interest expenses. Investors and creditors may view this trend negatively, as it raises concerns about Sunrun's financial stability and ability to handle its debt obligations effectively.