Texas Roadhouse Inc (TXRH)

The solvency ratios of Texas Roadhouse Inc indicates the company's ability to meet its debt obligations and the extent to which it relies on debt financing.

1. Debt-to-assets ratio:
- The debt-to-assets ratio has been consistently low over the years, indicating that Texas Roadhouse has primarily financed its assets through equity rather than debt. In 2023, the ratio dropped to 0.00, suggesting that the company has no debt in relation to its assets.

2. Debt-to-capital ratio:
- The debt-to-capital ratio also demonstrates a conservative financing approach by Texas Roadhouse, with the ratio steadily declining from 0.17 in 2020 to 0.05 in 2022, before reaching 0.00 in 2023. This implies that the company's capital structure is predominantly comprised of equity.

3. Debt-to-equity ratio:
- The debt-to-equity ratio follows a similar trend, showing a decrease in leverage over the years. In 2023, the ratio dropped to 0.00, signalling that the company has no debt relative to its equity.

4. Financial leverage ratio:
- The financial leverage ratio measures the company's total assets in comparison to its equity. Texas Roadhouse's financial leverage ratio has fluctuated slightly but remained relatively stable over the years, ranging from 2.17 in 2019 to 2.51 in 2020, before decreasing to 2.45 in 2023.

Overall, the solvency ratios of Texas Roadhouse Inc suggest a low level of debt and a strong reliance on equity financing, reflecting a conservative financial structure and a favorable position in meeting its debt obligations.

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Coverage ratios

Based on the data provided, Texas Roadhouse Inc's interest coverage has shown significant fluctuations over the past five years. In 2023, the interest coverage ratio surged to 707.98, reflecting a substantial increase compared to the previous year. This suggests that the company's earnings before interest and taxes (EBIT) were significantly higher relative to its interest expenses in 2023.

In 2022, the interest coverage ratio was 246.31, indicating a strong ability to cover interest obligations with earnings. However, the ratio dropped compared to 2021, where it stood at an impressive 1,485.96. This sharp decline may imply that the company experienced a decrease in EBIT relative to its interest payments in 2022.

In 2021 and 2019, Texas Roadhouse Inc also demonstrated robust interest coverage ratios of 1,485.96 and 140.04, respectively. These ratios indicate that the company generated sufficient earnings to comfortably cover its interest expenses during those years.

On the other hand, in 2020, the interest coverage ratio was 79.48, which is relatively lower compared to the other years analyzed. This may raise a concern regarding the company's ability to meet its interest obligations with its current level of earnings.

Overall, the fluctuating trend in Texas Roadhouse Inc's interest coverage ratios over the past five years highlights the importance of monitoring the company's financial performance and its ability to generate earnings to cover interest expenses effectively.