Service Corporation International (SCI)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.28 | 0.28 | 0.25 | 0.24 | 0.26 |
| Debt-to-capital ratio | 0.75 | 0.72 | 0.67 | 0.67 | 0.66 |
| Debt-to-equity ratio | 3.02 | 2.54 | 2.04 | 2.00 | 1.93 |
| Financial leverage ratio | 10.61 | 9.00 | 8.22 | 8.28 | 7.50 |
Service Corp. International's solvency ratios reflect its ability to meet its long-term financial obligations. The debt-to-assets ratio has remained relatively stable at around 0.26-0.29 over the past five years, indicating that approximately 26-29% of the company's assets are funded by debt.
The debt-to-capital ratio has shown an increasing trend from 0.66 in 2019 to 0.75 in 2023, suggesting that debt accounts for around 68-75% of the company's total capital structure. This indicates a higher dependency on debt financing for the company's operations.
The debt-to-equity ratio has been increasing steadily from 1.97 in 2019 to 3.08 in 2023, reflecting a higher proportion of debt in relation to equity. This could imply increased financial risk as higher debt levels may lead to higher interest payments and potential financial strain.
The financial leverage ratio has also been increasing from 7.50 in 2019 to 10.61 in 2023, indicating that the company is financing its operations with a significant amount of debt compared to equity. This ratio highlights the company's reliance on debt to support its operations and growth.
Overall, while the debt-to-assets ratio has remained relatively stable, the increasing trends in the debt-to-capital, debt-to-equity, and financial leverage ratios suggest that Service Corp. International is becoming more leveraged and may face higher financial risk due to its increasing reliance on debt financing. Investors and creditors should closely monitor these ratios to assess the company's solvency and financial health.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 3.96 | 5.39 | 7.94 | 5.06 | 3.50 |
Service Corp. International's interest coverage ratio has shown fluctuating trends over the past five years. The interest coverage ratio measures the company's ability to meet its interest obligations with its operating income.
An interest coverage ratio of 3.90 in 2023 indicates that the company's operating income was sufficient to cover its interest expenses 3.90 times. This represents a decrease from the previous year, where the ratio was 5.33. Despite the decrease, the company still maintains a reasonable level of interest coverage.
Comparing the current ratio to the ratios of the prior years, Service Corp. International's interest coverage has varied between 3.41 and 7.74, showing some level of volatility. The highest interest coverage ratio of 7.74 was observed in 2021, indicating strong operating income relative to interest expenses. However, the ratio decreased in 2023 compared to this peak level.
Overall, Service Corp. International's interest coverage ratio has shown some fluctuations over the past five years, which may indicate changes in the company's financial performance and ability to meet its interest obligations from operating income. It is essential for investors and creditors to monitor these ratios to assess the company's financial health and risk levels.