Vistra Energy Corp (VST)

Vistra Energy Corp has consistently maintained a strong solvency position over the years, as indicated by its low debt-to-assets, debt-to-capital, and debt-to-equity ratios of 0.00 for each year from 2020 to 2024. These ratios suggest that the company's level of debt compared to its total assets, capital, and equity is minimal, emphasizing a low financial risk and a healthy financial structure.

However, it is important to note that the financial leverage ratio shows an increasing trend from 3.01 in 2020 to 6.77 in 2024. This ratio indicates that the company's reliance on debt to finance its operations and growth has been escalating over the years, potentially increasing the financial risk associated with its capital structure. Despite the rising leverage ratio, the low debt-to-assets, debt-to-capital, and debt-to-equity ratios provide reassurance of the company's ability to meet its financial obligations and maintain financial stability.

Overall, Vistra Energy Corp's solvency ratios reflect a sound financial position with minimal debt levels in relation to its assets, capital, and equity, although the increasing financial leverage ratio warrants monitoring to ensure sustainable growth and financial health in the long term.

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Coverage ratios

Interest coverage is a key financial ratio used to evaluate a company's ability to meet its interest obligations on outstanding debt.

For Vistra Energy Corp, the interest coverage ratio has shown significant fluctuations over the years based on the provided data:

1. As of December 31, 2020, the interest coverage ratio was 2.66, indicating that the company generated 2.66 times the earnings needed to cover its interest expenses. This suggests a relatively healthy ability to fulfill its interest payment obligations.

2. However, the ratio dipped into negative territory in the subsequent years, with values of -3.11 as of December 31, 2021, and -1.92 as of December 31, 2022. A negative interest coverage ratio suggests that the company's earnings were insufficient to cover its interest expenses during those periods, raising concerns about its financial stability and ability to service its debt.

3. There was a noticeable improvement in the interest coverage ratio in the following years, with values of 3.49 as of December 31, 2023, and 5.04 as of December 31, 2024. These higher ratios indicate that the company's earnings have become more sufficient to cover its interest obligations, reflecting a better financial position and improved debt-servicing capacity.

In conclusion, Vistra Energy Corp's interest coverage ratio has displayed a mix of strengths and weaknesses over the years, with fluctuations that may reflect changes in the company's financial performance and debt servicing capabilities. It will be important for stakeholders to monitor this ratio closely to assess the company's ability to manage its debt and financial obligations effectively.