Vistra Energy Corp (VST)
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 | 6.21 | 6.69 | 3.58 | 3.01 | 3.34 |
Solvency ratios provide insight into a company's ability to meet its long-term financial obligations. Here is an analysis of Vistra Corp's solvency ratios based on the data provided:
1. Debt-to-assets ratio: This ratio indicates the proportion of a company's assets that are financed by debt. Vistra Corp's debt-to-assets ratio has been increasing over the past five years, from 0.41 in 2019 to 0.44 in 2023. This suggests that a larger portion of the company's assets is being funded by debt.
2. Debt-to-capital ratio: The debt-to-capital ratio reflects the proportion of a company's capital that comes from debt. Vistra Corp's debt-to-capital ratio has shown an upward trend, increasing from 0.53 in 2020 to 0.73 in 2023. This indicates a higher reliance on debt financing compared to capital.
3. Debt-to-equity ratio: The debt-to-equity ratio illustrates the extent to which a company's operations are funded by debt versus equity. Vistra Corp's debt-to-equity ratio has been fluctuating but generally increasing over the past five years, from 1.14 in 2020 to 2.71 in 2023. This indicates a higher level of financial risk as the company is increasingly reliant on debt to finance its operations.
4. Financial leverage ratio: The financial leverage ratio measures a company's total debt to its equity. Vistra Corp's financial leverage ratio has varied over the years but has mostly been on an uptrend, reaching 6.21 in 2023 from 3.01 in 2020. A higher financial leverage ratio suggests that the company relies more heavily on debt to fund its operations.
Overall, Vistra Corp's solvency ratios indicate a significant increase in leverage and reliance on debt over the years, which may raise concerns about the company's ability to meet its long-term financial obligations and withstand economic downturns. Investors and creditors may closely monitor these ratios to assess Vistra Corp's financial health and risk profile.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 3.70 | -3.29 | -3.51 | 2.43 | 2.53 |
The interest coverage ratio is a measure of a company's ability to meet its interest obligations on outstanding debt. A higher interest coverage ratio indicates a greater ability to cover interest expenses, while a lower ratio suggests potential difficulty in meeting interest payments.
Analyzing Vistra Corp's interest coverage over the past five years, we observe fluctuations in its ability to cover interest expenses. In 2023, the interest coverage ratio improved to 5.10, indicating a strong capacity to meet interest payments. This is a significant improvement compared to the negative ratios in 2022 and 2021, which suggest that the company struggled to cover interest expenses with its operating income.
The positive trend in interest coverage in 2023 may indicate better financial health and profitability for Vistra Corp. However, the company should continue monitoring and maintaining this improved ratio to ensure its ability to meet debt obligations. Additionally, further analysis of the company's financial performance and the reasons behind the fluctuations in interest coverage in previous years would provide a more comprehensive understanding of Vistra Corp's financial stability.