TKO Group Holdings, Inc. (TKO)
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 | 3.10 | 3.09 | 6.29 | 3.44 | 3.43 |
TKO Group Holdings, Inc. demonstrates a strong solvency position based on the provided solvency ratios. The debt-to-assets ratio and debt-to-capital ratio remained consistently at 0.00 across the five years from 2020 to 2024. This indicates that the company has no debt in relation to its total assets or total capital during this period.
Moreover, the debt-to-equity ratio also shows a consistent 0.00 for the same years. This implies that the company's equity is enough to cover any potential debts, further highlighting the absence of financial risk related to debt in the company's capital structure.
Looking at the financial leverage ratio, there was a spike in 2022 to 6.29 from 3.44 in 2021, indicating a significant increase in financial leverage that year. However, the ratio decreased in subsequent years to 3.09 in 2023 and 3.10 in 2024, remaining closer to the 2020 level of 3.43. This suggests that while there was a temporary increase in leverage in 2022, the company managed to bring it back to a more stable level in the following years.
Overall, the solvency ratios of TKO Group Holdings, Inc. demonstrate a consistent and robust financial position with minimal debt and a manageable level of financial leverage over the years.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 1.14 | 1.87 | 3.89 | 2.58 | 1.74 |
The interest coverage ratio measures the ability of TKO Group Holdings, Inc. to meet its interest payment obligations. A higher ratio indicates that the company is more capable of servicing its debt with its operating income.
Analyzing TKO Group's interest coverage over the years, we observe the following trends:
- As of December 31, 2020, the interest coverage ratio was reported at 1.74, indicating that the company's operating income could cover its interest expenses 1.74 times over. This suggests a relatively tighter financial position.
- By December 31, 2021, the interest coverage ratio improved to 2.58, signifying a better ability to cover interest payments compared to the previous year. This indicates an enhancement in the company's financial health.
- Subsequently, by December 31, 2022, the interest coverage ratio increased further to 3.89, reflecting a significant improvement in the company's capacity to handle its interest obligations comfortably.
- However, there was a slight decrease in the interest coverage ratio to 1.87 by December 31, 2023, which might indicate a potential strain on the company's ability to cover interest expenses adequately.
- Furthermore, by December 31, 2024, the interest coverage ratio dropped to 1.14, highlighting a concerning decline in the company's ability to meet its interest payment obligations from its operating income.
In conclusion, the trend in TKO Group Holdings, Inc.'s interest coverage ratio shows fluctuations over the years, with periods of improvement and setbacks. It is crucial for the company to closely monitor and manage its debt levels and operating performance to ensure sustainable financial stability and meet its debt obligations effectively.