Sunrun Inc (RUN)

The solvency ratios of Sunrun Inc indicate the company's ability to meet its long-term financial obligations and provide insights into its capital structure and leverage levels over the past five years.

1. Debt-to-assets ratio: Sunrun's debt-to-assets ratio has been increasing steadily over the years, indicating that the company's proportion of assets financed by debt has been growing. This suggests a higher level of financial risk as more of the company's assets are funded by debt.

2. Debt-to-capital ratio: Similarly, the debt-to-capital ratio has also been increasing, highlighting an increase in the proportion of capital provided by debt compared to equity. This could potentially indicate a higher reliance on debt financing for the company's operations and investments.

3. Debt-to-equity ratio: Sunrun's debt-to-equity ratio has fluctuated over the years but has generally trended upwards. The increasing trend indicates a higher level of debt relative to equity, suggesting that the company is more leveraged and potentially subject to higher financial risk.

4. Financial leverage ratio: The financial leverage ratio reflects the extent to which a company relies on debt financing. Sunrun's financial leverage ratio has shown fluctuations but has generally decreased over the years. A decreasing trend in the financial leverage ratio could suggest improvements in the company's ability to meet its debt obligations.

In summary, the solvency ratios of Sunrun Inc demonstrate a trend towards higher levels of debt relative to assets, capital, and equity, indicating an increased reliance on debt financing. However, improvements in the financial leverage ratio suggest potentially better debt management practices by the company in recent years.

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Coverage ratios

Interest coverage ratio is a measure of a company's ability to pay its interest expenses with its operating income. A higher interest coverage ratio indicates a stronger ability to meet interest obligations.

Looking at the data provided for Sunrun Inc, the interest coverage ratio has been consistently below 1 in the past five years, indicating that the company's operating income was insufficient to cover its interest expenses. The trend shows a slight improvement in 2023 compared to 2022, but the ratio remains negative, suggesting ongoing challenges in meeting interest obligations.

A negative interest coverage ratio typically raises concerns as it signifies that the company is not generating enough operating income to cover its interest expenses. This can indicate financial distress and potential difficulties in servicing debt obligations.

In summary, Sunrun Inc has struggled to cover its interest expenses with its operating income in recent years, and investors and creditors may closely monitor this ratio to assess the company's financial health and ability to manage its debt obligations.