Targa Resources Inc (TRGP)
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 | 7.55 | 7.34 | 7.56 | 5.98 | 3.82 |
Targa Resources Corp's solvency ratios indicate its ability to meet its long-term financial obligations and the extent to which debt is used to finance its operations.
The debt-to-assets ratio has consistently increased over the years, from 0.42 in 2019 to 0.63 in 2023, suggesting that a larger portion of the company's assets is funded by debt.
Similarly, the debt-to-capital ratio has also shown a rising trend, reaching 0.83 in 2023. This indicates that a significant portion of the company's capital structure is reliant on debt financing.
The debt-to-equity ratio has exhibited a substantial increase from 1.50 in 2019 to 4.73 in 2023, indicating a higher level of financial risk as debt levels have grown relative to equity.
Lastly, the financial leverage ratio has steadily increased over the years, from 3.62 in 2019 to 7.55 in 2023. This ratio highlights the extent to which the company is using debt to support its operations and investments.
Overall, the increasing trend in these solvency ratios suggests that Targa Resources Corp has been relying more on debt to finance its operations and growth, which may raise concerns about its long-term financial stability and ability to service its debt obligations. Investors and creditors may closely monitor these ratios to assess the company's solvency risk.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 47.66 | 87.32 | 166.31 | -37.90 | 3.04 |
The interest coverage ratio for Targa Resources Corp has shown a generally stable trend over the past five years, ranging from 1.62 in 2019 to 3.90 in 2022. This ratio indicates the company's ability to cover its interest expenses with its operating income.
The highest interest coverage ratio of 3.90 in 2022 suggests that the company's operating income was almost four times its interest expenses for that year. This indicates a healthy financial position and a lower risk of defaulting on debt payments.
While the ratio decreased slightly to 3.83 in 2023, it still remains relatively strong and suggests that Targa Resources Corp continues to generate sufficient operating income to cover its interest obligations.
Overall, the consistent and relatively high interest coverage ratios indicate that Targa Resources Corp has been effectively managing its debt and interest expenses in recent years.