Tegna Inc (TGNA)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.44 | 0.42 | 0.47 | 0.52 | 0.60 |
| Debt-to-capital ratio | 0.53 | 0.50 | 0.56 | 0.63 | 0.72 |
| Debt-to-equity ratio | 1.14 | 1.00 | 1.28 | 1.73 | 2.63 |
| Financial leverage ratio | 2.59 | 2.39 | 2.75 | 3.33 | 4.37 |
Solvency ratios are key indicators of a company's ability to meet its long-term financial obligations. In the case of TEGNA Inc, we can analyze its solvency using four important ratios: Debt-to-assets ratio, Debt-to-capital ratio, Debt-to-equity ratio, and Financial leverage ratio.
1. Debt-to-assets ratio:
This ratio indicates the proportion of TEGNA's assets that are financed by debt. From 2019 to 2023, the debt-to-assets ratio has shown a declining trend, decreasing from 0.6 to 0.44. This suggests that the company has been reducing its reliance on debt to finance its assets, which is a positive sign for solvency.
2. Debt-to-capital ratio:
The debt-to-capital ratio reflects the extent to which debt is used to finance TEGNA's operations compared to equity. Similar to the debt-to-assets ratio, the trend for the debt-to-capital ratio has been decreasing over the years, indicating a strengthening solvency position for the company.
3. Debt-to-equity ratio:
The debt-to-equity ratio measures the proportion of TEGNA's financing that comes from debt relative to equity. TEGNA's debt-to-equity ratio has also been on a downward trajectory, declining from 2.63 in 2019 to 1.14 in 2023. This decline indicates that the company has been reducing its reliance on debt in relation to equity, which is a positive indicator of solvency.
4. Financial leverage ratio:
The financial leverage ratio provides a broader view of TEGNA's financial risk by measuring the company's total assets relative to equity. A decreasing trend in the financial leverage ratio, as seen in TEGNA's case, signifies a lower level of financial risk and a stronger solvency position.
Overall, based on the analysis of these solvency ratios, it can be observed that TEGNA Inc has been progressively improving its solvency position over the years by reducing its reliance on debt and managing its financial leverage effectively. This trend suggests that the company is in a sound financial position to meet its long-term obligations and is making prudent financial decisions to enhance its solvency.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 4.51 | 5.79 | 4.30 | 4.03 | 2.83 |
Interest coverage is a financial ratio that measures a company's ability to pay its interest expenses on outstanding debt. TEGNA Inc's interest coverage ratio has shown fluctuations over the past five years, ranging from a low of 2.74 in 2019 to a high of 5.67 in 2022. A higher interest coverage ratio indicates that the company is better positioned to meet its interest obligations from its earnings.
In 2023, TEGNA Inc's interest coverage ratio stood at 4.18, indicating that the company generated operating income 4.18 times greater than its interest expense during the year. While this ratio is lower than the previous year, it still demonstrates the company's ability to comfortably cover its interest payments. However, it is important for TEGNA Inc to monitor its interest coverage ratio to ensure it remains at a healthy level, as a declining ratio may signal potential financial distress or increased risk for the company.