Trex Company Inc (TREX)
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 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 1.30 | 1.80 | 1.27 | 1.31 | 1.32 |
The solvency ratios of TREX Co., Inc. reflect a strong financial position with consistently low levels of debt relative to assets and capital over the five-year period from 2019 to 2023. The debt-to-assets ratio steadily declined from 0.24 in 2022 to a minimal 0.01 in 2023, indicating that the company's assets are largely financed through equity rather than debt.
Similarly, the debt-to-capital ratio followed a decreasing trend from 0.30 in 2022 to 0.01 in 2023, suggesting that a minimal portion of TREX Co., Inc.'s capital structure is reliant on debt financing. The debt-to-equity ratio also exhibited a reduction from 0.43 in 2022 to 0.01 in 2023, demonstrating the company's strong capacity to cover its obligations through equity.
The financial leverage ratio, which measures the extent to which the company relies on debt financing, decreased from 1.80 in 2022 to 1.30 in 2023. This downward trajectory indicates that TREX Co., Inc. has been reducing its dependence on debt to support its operations and investments, enhancing its solvency and financial stability.
Overall, the consistent decline in debt ratios and financial leverage over the years suggests that TREX Co., Inc. has effectively managed its debt levels and maintained a healthy balance between debt and equity in its capital structure. This strong solvency position bodes well for the company's ability to weather financial challenges and sustain long-term growth.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 55,240.80 | 8.03 | 3.03 | — | 125.22 |
The interest coverage ratio for TREX Co., Inc. as of December 31, 2023, is significantly high at 55,240.80. This indicates that the company generated ample operating income to cover its interest expenses by a wide margin in that period. However, it is noteworthy that data for the previous years (2022, 2021, 2020, and 2019) is not provided, making it difficult to assess the trend of the interest coverage ratio over time. Nonetheless, with such a high interest coverage ratio in 2023, TREX Co., Inc. appears to have a strong ability to meet its interest payment obligations from its operating earnings.