Tetra Tech Inc (TTEK)

The solvency ratios of Tetra Tech Inc indicate the company's ability to meet its long-term financial obligations. Looking at the trend over the past five years:

1. Debt-to-assets ratio has increased from 0.12 in 2019 to 0.23 in 2023, indicating that the company's reliance on debt to finance its assets has grown. While this ratio has increased, it is still relatively low, suggesting a conservative approach to leveraging its assets.

2. Debt-to-capital ratio has also shown an increasing trend, rising from 0.21 in 2019 to 0.39 in 2023. This indicates that a larger portion of the company's capital structure is funded by debt, which potentially increases financial risk.

3. Debt-to-equity ratio has followed a similar pattern, increasing from 0.27 in 2019 to 0.63 in 2023. This suggests that Tetra Tech has been relying more heavily on debt financing compared to equity financing.

4. Financial leverage ratio has fluctuated but has generally increased over the five-year period from 2.17 in 2019 to 2.72 in 2023. This ratio indicates the company's level of financial risk and shows that Tetra Tech's financial leverage has been rising, possibly increasing the overall risk exposure of the company.

Overall, despite the increasing trend in these solvency ratios, Tetra Tech Inc's solvency position appears to be adequately managed, as the ratios are still within reasonable limits and do not pose an immediate solvency risk. However, it is crucial for the company to monitor and manage its debt levels carefully to ensure long-term financial stability.

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Coverage ratios

Interest coverage measures the ability of Tetra Tech Inc to meet its interest payments on debt obligations. A higher interest coverage ratio indicates a stronger ability to cover interest expenses from operating profits.

Over the past five years, Tetra Tech's interest coverage ratio has shown an increasing trend, starting at 12.29 in 2019 and reaching 6.83 in 2023. This signals a consistent improvement in the company's ability to cover interest payments.

In 2022, Tetra Tech's interest coverage ratio was particularly high at 25.47, indicating robust financial health and a strong ability to meet interest obligations. This may have been influenced by higher operating profits relative to the interest expenses in that year.

Overall, Tetra Tech Inc has demonstrated a solid capacity to manage its interest payments, with the interest coverage ratio consistently above industry benchmarks. However, it's important to monitor this ratio over time to ensure the company maintains its ability to service its debt obligations effectively.