Tetra Tech Inc (TTEK)

Tetra Tech Inc's solvency ratios provide valuable insights into the company's financial health and its ability to meet its long-term financial obligations. The debt-to-assets ratio has shown a significant improvement over the years, decreasing from 0.23 in 2023 to 0.00 in 2024. This indicates that the company has effectively managed its debt levels in relation to its total assets.

Similarly, the debt-to-capital ratio, which reflects the proportion of debt used to finance the company's operations, has also decreased steadily from 0.39 in 2023 to 0.00 in 2024. This suggests that Tetra Tech has reduced its reliance on debt as a source of capital.

The debt-to-equity ratio measures the company's financial leverage and risk exposure to debt. Tetra Tech has shown a consistent decline in this ratio from 0.63 in 2023 to 0.00 in 2024, indicating a lower reliance on debt funding in relation to shareholders' equity.

The financial leverage ratio, which compares the company's total assets to its equity, has fluctuated over the years but remained fairly stable within a range of 2.09 to 2.72. This suggests that Tetra Tech has maintained a moderate level of financial leverage to support its operations and investments.

Overall, Tetra Tech's solvency ratios demonstrate a strong financial position with decreasing reliance on debt financing and improved balance sheet strength. This indicates a lower risk of financial distress and a greater ability to meet its long-term financial obligations.

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Coverage ratios

The interest coverage ratio for Tetra Tech Inc has shown fluctuations over the past five years. In the most recent period as of September 30, 2024, the interest coverage ratio stood at 13.44. This indicates that Tetra Tech's operating income is sufficient to cover its interest expenses by 13.44 times. Compared to the previous year, there has been a notable increase in the interest coverage ratio, reflecting improved ability to meet interest obligations.

Looking back, in September 30, 2023, the interest coverage ratio was 6.83, indicating that Tetra Tech's operating income covered its interest expenses 6.83 times. The significant increase in the ratio in the following year, reaching 25.47 in September 30, 2022, suggests a substantial improvement in the company's ability to service its debt.

Similarly, in the years prior, Tetra Tech maintained healthy interest coverage ratios, with figures of 21.86 in September 30, 2021, and 16.66 in September 30, 2020. These ratios indicate that the company consistently generated operating income more than sufficient to cover its interest expenses, thereby demonstrating strong financial stability with respect to debt obligations.

Overall, Tetra Tech Inc's interest coverage ratio has displayed fluctuation, but on the whole, the company has maintained healthy levels of interest coverage over the five-year period, indicating a solid ability to meet interest payments from operating income.