Targa Resources Inc (TRGP)
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 | 8.77 | 7.55 | 7.34 | 5.51 | 5.37 |
Targa Resources Inc's solvency ratios provide insight into the company's ability to meet its long-term financial obligations. Based on the data provided, the debt-to-assets ratio, debt-to-capital ratio, and debt-to-equity ratio have all remained consistently at 0.00 from December 31, 2020, to December 31, 2024. This suggests that the company has not used debt significantly to finance its assets or operations during this period.
The financial leverage ratio, on the other hand, has shown an increasing trend over the years, rising from 5.37 in 2020 to 8.77 in 2024. This indicates that the company's reliance on debt to finance its operations and investments has grown substantially over the period, potentially increasing the financial risk for the business.
Overall, while Targa Resources Inc has maintained a low debt level relative to its assets, capital, and equity, the increasing financial leverage ratio signals a higher degree of financial risk as the company has taken on more debt to support its growth and operations. It will be important for the company to carefully manage its debt levels and ensure effective capital structure to maintain financial stability and solvency in the long run.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 3.53 | 3.82 | 3.88 | 2.13 | -3.02 |
The interest coverage ratio for Targa Resources Inc has depicted a fluctuating trend over the past few years. In 2020, the interest coverage ratio was negative, indicating potential financial distress as the company's operating profit was insufficient to cover its interest expenses.
However, the situation improved significantly in 2021 with an interest coverage ratio of 2.13, showing that the company's operating income was more than twice the size of its interest expenses. This implies a better financial position and a reduced risk of default on interest payments.
Furthermore, the interest coverage ratio continued to strengthen in 2022, 2023, and 2024, reaching levels of 3.88, 3.82, and 3.53 respectively. These increasing values indicate a healthier financial position for Targa Resources Inc, as the company's ability to cover its interest obligations improved over time.
Overall, the upward trend in the interest coverage ratio reflects an enhanced capacity of Targa Resources Inc to meet its interest expenses from its operating income, signaling improved financial stability and reduced risk for investors and creditors.