Select Medical Holdings (SEM)
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 | 3.34 | 5.97 | 5.82 | 5.55 | 7.22 |
Select Medical Holdings has consistently maintained a strong solvency position, as reflected by its debt-related ratios. The company's debt-to-assets ratio, debt-to-capital ratio, and debt-to-equity ratio have all been at 0.00 across the years 2020 to 2024, indicating that the company carries no long-term debt relative to its assets, capital, or equity.
Additionally, the financial leverage ratio decreased steadily from 7.22 in 2020 to 3.34 in 2024. This downward trend suggests that the company has been reducing its reliance on debt financing over the years, which has led to a lower level of financial risk and enhanced financial stability.
Overall, these solvency ratios demonstrate Select Medical Holdings' ability to meet its long-term financial obligations without being overly leveraged, thereby indicating a healthy and sustainable financial position.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 2.36 | 2.92 | 2.24 | 4.19 | 3.12 |
To analyze Select Medical Holdings' interest coverage over the years, we utilize the interest coverage ratio, which indicates the company's ability to meet its interest obligations.
The interest coverage ratio for Select Medical Holdings has fluctuated over the past five years:
- As of December 31, 2020, the interest coverage ratio was 3.12, suggesting that the company generated enough operating income to cover its interest expenses 3.12 times.
- By December 31, 2021, the interest coverage ratio improved to 4.19, indicating a stronger ability to cover interest payments from operating earnings.
- However, the ratio decreased in the following years, reaching 2.24 by December 31, 2022, 2.92 by December 31, 2023, and 2.36 by December 31, 2024.
The decreasing trend in the interest coverage ratio from 2021 to 2024 may indicate that the company's ability to service its interest payments declined over this period. A declining interest coverage ratio could raise concerns about the company's financial stability and its ability to meet its debt obligations.
It is essential for investors and stakeholders to monitor the interest coverage ratio closely as a lower ratio could signal potential financial distress or increased risk for the company. Additionally, management may need to explore strategies to improve the interest coverage ratio to ensure the company's long-term financial health.