US Physicalrapy Inc (USPH)

The solvency ratios of U.S. Physical Therapy, Inc. provide insights into the company's ability to meet its long-term financial obligations.

1. Debt-to-assets ratio: This ratio indicates the proportion of the company's assets financed by debt. The decreasing trend from 2020 to 2023 (0.04 to 0.15) shows an increase in asset coverage by equity rather than debt, reflecting a stronger financial position.

2. Debt-to-capital ratio: This ratio compares total debt to total capital (debt and equity). The declining trend from 2020 to 2023 (0.07 to 0.24) suggests a lower reliance on debt in the company's capital structure over time, indicating improved financial stability.

3. Debt-to-equity ratio: This ratio illustrates the extent to which debt is used to finance the company's operations compared to equity. The decreasing trend from 2020 to 2023 (0.08 to 0.31) indicates a shift towards a more equity-funded capital structure, leading to a lower financial risk for the company.

4. Financial leverage ratio: This ratio measures the company's financial leverage or the extent to which the company relies on debt financing. The trend from 2020 to 2023 (2.15 to 2.09) shows a relatively stable financial leverage ratio, indicating a balanced mix of debt and equity in the company's capital structure.

Overall, the decreasing trends in the debt-based ratios reflect a positive shift towards a more conservative financial structure with less reliance on debt financing, enhancing the solvency and financial stability of U.S. Physical Therapy, Inc.

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Coverage ratios

U.S. Physical Therapy, Inc.'s interest coverage ratio has fluctuated over the past five years, ranging from 11.61 in 2019 to 75.15 in 2021. The interest coverage ratio measures the company's ability to pay off its interest expenses with its operating income. The trend indicates that the company's ability to cover its interest payments improved significantly in 2021 compared to the previous years, marking a strong financial position. However, in 2023, the interest coverage ratio slightly decreased to 12.75, which may indicate a slight decrease in the company's ability to cover its interest expenses. Overall, a higher interest coverage ratio is generally preferred as it suggests a lower risk of financial distress due to difficulties in meeting interest obligations.