RXO Inc. (RXO)
Solvency ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 1.28 | 2,053.27 | 3.13 | 3.09 | 3.07 | 3.30 | 3.25 | 3.45 | 3.46 | 1.96 | 1.98 | 2.20 | 1.93 |
Based on the solvency ratios of RXO Inc., we can observe the following trends:
1. Debt-to-assets ratio: This ratio remained consistently at 0.00 throughout the period from December 31, 2021, to December 31, 2024. This indicates that the company did not have any debt in relation to its total assets during this time frame, reflecting a strong financial position in terms of solvency.
2. Debt-to-capital ratio: Similar to the debt-to-assets ratio, the debt-to-capital ratio also remained at 0.00 consistently from December 31, 2021, to December 31, 2024. This suggests that RXO Inc. did not rely on debt to finance its capital structure, highlighting a stable and healthy financial condition.
3. Debt-to-equity ratio: The debt-to-equity ratio was also recorded at 0.00 across all quarters from December 31, 2021, to December 31, 2024. This implies that the company's level of debt was minimal in comparison to its equity, indicating a low risk of financial distress due to debt obligations.
4. Financial leverage ratio: The financial leverage ratio showed some fluctuations over the period under consideration, ranging from 1.93 on December 31, 2021, to a peak of 2,053.27 on September 30, 2024. While some fluctuation is expected, the significant spike in the financial leverage ratio on September 30, 2024, raises concerns about a sudden increase in leverage, which may indicate a riskier financial position.
Overall, based on the solvency ratios analyzed, RXO Inc. appears to have maintained a solid solvency position with low levels of debt relative to its assets, capital, and equity. However, the spike in the financial leverage ratio on September 30, 2024, warrants further investigation to understand the sudden increase in leverage and its potential implications for the company's financial stability.
Coverage ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | -0.97 | 0.26 | 0.79 | 1.21 | 1.96 | 1.62 | 2.03 | 4.88 | 8.38 | 12.94 | 28.62 | 24.62 | 39.20 |
Based on the provided data, RXO Inc.'s interest coverage ratio has been on a declining trend over the analyzed periods, indicating a potential worsening financial health in terms of its ability to cover interest expenses with operating income.
The interest coverage ratio dropped significantly from 39.20 on December 31, 2021, to -0.97 on December 31, 2024. This sharp decline suggests that RXO Inc. may be facing challenges in generating sufficient operating income to meet its interest obligations, potentially raising concerns about its solvency and financial stability.
A decreasing interest coverage ratio could signal increased financial risk as the company may struggle to service its debt, which could lead to credit rating downgrades, higher borrowing costs, or even default if the trend persists. It is crucial for investors and creditors to monitor this ratio closely to assess RXO Inc.'s ability to meet its interest payments and manage its debt obligations effectively.