Trex Company Inc (TREX)
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 | 1.56 | 1.30 | 1.80 | 1.27 | 1.31 |
Trex Company Inc's solvency ratios indicate a very strong financial position with consistently low levels of debt relative to its assets, capital, and equity. The Debt-to-assets ratio, Debt-to-capital ratio, and Debt-to-equity ratio have all remained at 0.00 from December 31, 2020, to December 31, 2024, indicating that the company has no significant debt in relation to these financial metrics.
The Financial leverage ratio, which measures the proportion of assets financed by debt, has fluctuated slightly over the same period. It was 1.31 on December 31, 2020, decreased to 1.27 by December 31, 2021, spiked to 1.80 on December 31, 2022, then decreased to 1.30 by December 31, 2023, and rose again to 1.56 by December 31, 2024. Despite these fluctuations, the ratios generally remain at reasonable levels, signifying that Trex Company Inc has managed its leverage effectively.
Overall, these solvency ratios suggest that Trex Company Inc is in a robust financial position with minimal debt obligations, which bodes well for its ability to meet any financial challenges and pursue growth opportunities.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 27,788.45 | 55,240.80 | 8.03 | 3.03 | 233.87 |
The interest coverage ratio for Trex Company Inc has fluctuated significantly over the years. As of December 31, 2020, the interest coverage ratio was a robust 233.87, indicating that the company's earnings before interest and taxes (EBIT) were more than sufficient to cover its interest expenses. However, by December 31, 2021, the interest coverage ratio declined sharply to 3.03, suggesting a significant decrease in EBIT relative to interest expenses.
Subsequently, the interest coverage ratio improved in the following years, reaching 8.03 by December 31, 2022, indicating a better ability to cover interest obligations. The ratio then surged remarkably to 55,240.80 by December 31, 2023, and maintained a high level at 27,788.45 by December 31, 2024. Such exceptionally high values in 2023 and 2024 suggest a vast increase in EBIT relative to interest expenses, reflecting a very strong financial position in those years.
Overall, the interest coverage ratios for Trex Company Inc show fluctuations in the company's ability to comfortably meet its interest payments over the years, with significant improvements in coverage observed after a temporary decline in 2021.