Sterling Construction Company Inc (STRL)
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 | 2.50 | 2.87 | 3.04 | 3.44 | 3.56 |
The solvency analysis of Sterling Construction Company Inc. demonstrates a consistent pattern over the period from December 31, 2020, to December 31, 2024. The debt-to-assets ratio, debt-to-capital ratio, and debt-to-equity ratio are uniformly zero throughout this timeframe. This indicates that the company has not reported any long-term or short-term debt, effectively operating without leverage from external financing sources. The absence of debt signifies that the company's capital structure is entirely composed of shareholders' equity, implying a self-financed or equity-only operational model.
In addition to the zero debt ratios, the financial leverage ratio exhibits a decreasing trend, declining from 3.56 in 2020 to 2.50 in 2024. The leverage ratio measures the degree to which a company is utilizing debt to finance its assets. A decreasing ratio suggests that the company has been reducing its financial leverage over this period, moving towards a more conservative financial position.
Overall, the company’s solvency profile indicates an entirely equity-financed structure with no reliance on debt, coupled with a gradual reduction in financial leverage. This positions Sterling Construction Company Inc. as having a strong solvency outlook, with minimal financial risk associated with debt obligations.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 15.19 | 7.50 | 7.74 | 5.69 | 3.19 |
The interest coverage ratio for Sterling Construction Company Inc has exhibited a positive and generally upward trend over the period from December 31, 2020, to December 31, 2024. Specifically, the ratio increased from 3.19 in 2020 to 5.69 in 2021, indicating an improved ability to meet interest obligations relative to earnings before interest and taxes (EBIT). The ratio further rose to 7.74 in 2022, suggesting enhanced earnings capacity to cover interest expenses. Although there was a slight decline to 7.50 in 2023, the ratio remains substantially higher than the earlier periods, reflecting continued strength in earnings relative to interest costs. The most notable change occurs in 2024, where the ratio surges to 15.19, indicating a significant improvement in the company's ability to cover interest payments, which may be attributable to increased earnings or decreased interest expense. Overall, the trend suggests a progressive strengthening of Sterling Construction Company's financial stability concerning its interest obligations over the analyzed period.