Union Pacific Corporation (UNP)
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 | 4.54 | 5.38 | 4.49 | 3.68 | 3.40 |
The solvency ratios of Union Pacific Corp., as indicated by the data provided, show trends in the company's leverage and ability to meet its financial obligations over the past five years.
1. Debt-to-assets ratio:
- The debt-to-assets ratio has ranged from 0.41 to 0.51 over the past five years, with a decrease from 0.51 in 2022 to 0.49 in 2023. This ratio indicates that 49% of the company's assets are financed by debt in 2023.
2. Debt-to-capital ratio:
- The debt-to-capital ratio has fluctuated between 0.58 and 0.73, with a decrease from 0.73 in 2022 to 0.69 in 2023. This ratio suggests that 69% of the company's capital structure is debt-financed in 2023.
3. Debt-to-equity ratio:
- The debt-to-equity ratio has shown variations from 1.39 to 2.74, with a notable reduction from 2.74 in 2022 to 2.20 in 2023. This ratio indicates that the company's debt is 2.20 times the value of its equity in 2023.
4. Financial leverage ratio:
- The financial leverage ratio has ranged from 3.40 to 5.38, with a decrease from 5.38 in 2022 to 4.54 in 2023. This ratio implies that the company's assets are financially leveraged 4.54 times in 2023.
Overall, Union Pacific Corp. has shown a general trend of decreasing leverage ratios over the past year, suggesting an improved solvency position and a reduced reliance on debt financing to support its operations. However, further analysis and comparison to industry benchmarks would provide a more comprehensive understanding of the company's solvency.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 7.14 | 8.14 | 8.33 | 7.12 | 8.38 |
The interest coverage ratio for Union Pacific Corp. has shown a decreasing trend over the past five years, declining from 8.67 in 2019 to 7.05 in 2023. This indicates that the company's ability to cover its interest expenses with its operating profits has weakened over the period. Although the ratios are above 1, suggesting that the company generates enough operating income to cover its interest obligations, the downward trend may raise concerns about the company's ability to handle its debt service costs in the future. It is important for investors and analysts to monitor this trend closely to ensure the company's financial health and stability.