Telephone and Data Systems Inc (TDS)

Telephone and Data Systems Inc has consistently maintained a strong solvency position over the years, as evidenced by the following key solvency ratios:

1. Debt-to-assets ratio: The company's debt-to-assets ratio has remained at 0.00 for all the years analyzed (from 2020 to 2024). This indicates that the company has not relied heavily on debt to finance its assets, reflecting a low financial risk in terms of asset coverage.

2. Debt-to-capital ratio: Similar to the debt-to-assets ratio, the debt-to-capital ratio has also been consistently at 0.00 across the years. This suggests that the company has effectively managed its capital structure without significant reliance on debt capital.

3. Debt-to-equity ratio: The debt-to-equity ratio has also remained stable at 0.00 throughout the period under review. This indicates that the company's financial structure is balanced, with no significant debt burden in relation to its equity.

4. Financial leverage ratio: The financial leverage ratio, which measures the extent to which a company uses debt financing, has shown a slight increase from 2.61 in 2020 to 2.69 in 2024. While this ratio has increased over time, it still remains relatively low, indicating that the company's financial risk is manageable.

Overall, based on these solvency ratios, Telephone and Data Systems Inc appears to have a solid financial position with prudent debt management practices, which contributes to its stability and ability to meet its financial obligations effectively.

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Coverage ratios

The interest coverage ratio for Telephone and Data Systems Inc has shown a declining trend over the years. As of December 31, 2020, the ratio stood at 1.67, indicating that the company generated 1.67 times the earnings needed to cover its interest expenses. However, by December 31, 2021, the ratio decreased to 1.23, suggesting a lower ability to cover interest payments.

Furthermore, by December 31, 2022, the interest coverage ratio dropped further to 0.87, falling below 1. This implies that the company's earnings were insufficient to cover its interest expenses, which may raise concerns about the company's financial health and ability to meet its debt obligations.

The situation worsened significantly by December 31, 2023, when the interest coverage ratio turned negative at -0.95. A negative ratio suggests that the company's earnings were insufficient to cover its interest expenses, indicating potential financial distress.

However, there was a slight improvement by December 31, 2024, where the interest coverage ratio increased to 0.93. While still below 1, this uptick may indicate some stabilization in the company's ability to cover its interest payments.

Overall, the declining trend in the interest coverage ratio for Telephone and Data Systems Inc raises concerns about its financial sustainability and ability to service its debt obligations. Investors and stakeholders may closely monitor this ratio to assess the company's financial risk and viability.