Tenet Healthcare Corporation (THC)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| 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 | — |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | — |
| Financial leverage ratio | 17.61 | 23.78 | 26.83 | 968.07 | — |
Tenet Healthcare Corp.'s solvency ratios indicate its ability to meet its long-term financial obligations. The debt-to-assets ratio has shown a decreasing trend from 0.63 in 2019 to 0.53 in 2023, indicating that the company has been reducing its reliance on debt to finance its assets.
Similarly, the debt-to-capital and debt-to-equity ratios have also declined over the years, with the debt-to-capital ratio decreasing from 1.03 in 2019 to 0.90 in 2023, and the debt-to-equity ratio declining from 561.39 in 2020 to 9.33 in 2023. These trends suggest that Tenet Healthcare has been improving its capital structure by reducing its debt levels relative to its capital and equity.
The financial leverage ratio, which measures the extent to which the company uses debt financing to support its operations, has also shown a decreasing trend, falling from 968.07 in 2020 to 17.61 in 2023. This indicates that the company has significantly reduced its financial leverage and is less reliant on debt to fund its operations.
Overall, Tenet Healthcare Corp.'s solvency ratios have shown an improving trend over the years, suggesting that the company has been effectively managing its debt levels and enhancing its long-term financial stability.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 2.79 | 2.62 | 3.11 | 1.98 | 1.56 |
Tenet Healthcare Corp.'s interest coverage ratio has shown an improving trend over the past five years, indicating the company's ability to meet its interest obligations from its earnings. The interest coverage ratio increased steadily from 1.88 in 2019 to 2.96 in 2023. This suggests that the company's earnings are sufficient to cover its interest expenses almost three times in 2023, up from less than two times in 2019.
A higher interest coverage ratio is generally seen as a positive indicator, reflecting a lower financial risk for the company as it implies a greater margin of safety to meet interest payments. Tenet Healthcare Corp.'s consistent improvement in interest coverage ratio over the years indicates enhanced financial health and stability, suggesting a reduced likelihood of defaulting on its interest obligations.