Trex Company Inc (TREX)
Solvency ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 1.30 | 1.44 | 1.72 | 2.02 | 1.80 | 1.51 | 1.38 | 1.35 | 1.27 | 1.32 | 1.39 | 1.53 | 1.31 | 1.32 | 1.34 | 1.40 | 1.32 | 1.35 | 1.37 | 1.47 |
TREX Co., Inc.'s solvency ratios indicate the company's ability to meet its long-term debt obligations. The trends observed in the debt-to-assets, debt-to-capital, and debt-to-equity ratios show a gradual increase in leverage from Q1 2023 to Q4 2023.
The debt-to-assets ratio, which measures the proportion of assets financed by debt, has increased from 0.01 in Q4 2022 to 0.33 in Q1 2023, before declining to 0.01 in Q4 2023. This indicates that the company has reduced its reliance on debt to finance its assets over the quarters.
Similarly, the debt-to-capital ratio and debt-to-equity ratio have shown a similar pattern, peaking at 0.40 and 0.66 in Q1 2023, respectively, before decreasing to 0.01 and showing a steady trend downwards in subsequent quarters. This suggests that TREX Co., Inc. has been reducing its debt levels in relation to both its total capital and equity.
The financial leverage ratio, which reflects the company's ability to meet its financial obligations, has exhibited fluctuations over the quarters, ranging from 1.30 in Q4 2022 to 2.02 in Q1 2023, before decreasing to 1.35 in Q1 2023. These fluctuations may indicate changes in the company's capital structure and its ability to use debt as a leveraged investment tool.
Overall, the downward trends in the solvency ratios suggest that TREX Co., Inc. has been effectively managing its debt levels and improving its financial leverage position over time. Investors and stakeholders may view this favorably as lower leverage ratios typically indicate a lower risk of financial distress and a stronger financial position for the company.
Coverage ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 46,034.17 | 98.83 | 57.69 | 94.75 | 1,063.52 | 1,810.68 | 2,201.89 | 5,881.56 | 6,716.54 | 1,353.17 | 620.73 | 506.23 | 233.87 | 147.51 | 107.79 | 103.67 | 125.22 | 127.15 | 186.62 | 138.25 |
The interest coverage ratio for TREX Co., Inc. fluctuated significantly throughout the quarters under examination. In Q4 2023, the interest coverage ratio was 55,240.80, indicating a substantial ability to cover interest expenses. However, this ratio sharply declined in Q3 and Q2 2023 to 108.85 and 64.19, respectively, suggesting a potential decrease in the company's ability to cover interest payments during those periods. This trend was somewhat mitigated in Q1 2023, where the interest coverage ratio improved to 120.00, albeit still lower than Q4 2023.
The absence of data for Q4 2022 and the blank entries for the subsequent quarters limit the full trend analysis. However, the exceptionally high interest coverage ratio of 175,671.50 in Q1 2022 stands out, indicating a significant surplus in operational earnings to cover interest expenses at that time.
Overall, the analysis suggests volatility and potential fluctuations in TREX Co., Inc.'s ability to cover its interest payments, with a combination of strong and weaker performance observed across the quarters.