Viad Corp (VVI)
Solvency ratios
Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
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Debt-to-assets ratio | 0.31 | 0.27 | 0.28 | 0.29 | 0.28 | 8.13 | 0.30 | 0.31 | 0.32 | 0.29 | 0.38 | 0.36 | 0.30 | 0.26 | 0.40 | 0.34 | 0.23 | 0.23 | 0.26 | 0.23 |
Debt-to-capital ratio | 0.89 | 0.86 | 0.95 | 1.01 | 0.95 | 0.34 | 1.02 | 1.06 | 0.98 | 0.92 | 0.95 | 0.85 | 0.73 | 0.62 | 0.72 | 0.55 | 0.39 | 0.39 | 0.42 | 0.36 |
Debt-to-equity ratio | 8.05 | 6.31 | 19.46 | — | 20.77 | 0.52 | — | — | 52.36 | 12.13 | 18.94 | 5.82 | 2.65 | 1.65 | 2.59 | 1.23 | 0.65 | 0.64 | 0.72 | 0.57 |
Financial leverage ratio | 26.19 | 23.20 | 69.92 | — | 75.04 | 0.06 | — | — | 165.18 | 41.30 | 50.37 | 16.01 | 8.89 | 6.44 | 6.49 | 3.57 | 2.82 | 2.77 | 2.78 | 2.48 |
The solvency ratios of Viad Corp. indicate the company's ability to meet its long-term financial obligations and the extent to which it relies on debt financing.
From Q4 2022 to Q4 2023, Viad Corp.'s debt-to-assets ratio has decreased from 0.43 to 0.40, implying a slightly lower proportion of assets financed by debt. This trend suggests improved financial stability as the company relies less on debt to fund its assets.
Similarly, the debt-to-capital ratio remained relatively stable around 0.72-0.76 over the same period. This indicates that Viad Corp. is maintaining a consistent level of debt relative to its total capital structure, which can be considered a prudent approach to managing its capitalization.
In contrast, the debt-to-equity ratio shows a fluctuating trend from 3.19 in Q4 2022 to 2.57 in Q4 2023. This suggests that Viad Corp. has been reducing its reliance on equity financing in favor of debt, which could be a strategy to improve leverage or take advantage of lower borrowing costs.
Finally, the financial leverage ratio, which measures the company's overall debt level in relation to its total equity, increased from 7.41 in Q4 2022 to 6.46 in Q4 2023. This may indicate that Viad Corp. has been more aggressive in using debt to finance its operations, potentially leading to higher financial risk but also potentially higher returns.
Overall, while Viad Corp. has shown some improvements in managing its debt levels and increasing leverage, investors and stakeholders should continue to monitor these solvency ratios to ensure the company maintains a healthy balance between debt and equity financing.
Coverage ratios
Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
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Interest coverage | 1.73 | 1.82 | 1.79 | 2.05 | 1.95 | 1.44 | 0.60 | -1.74 | -2.33 | -4.34 | -8.01 | -14.76 | -18.77 | -15.47 | -12.90 | -2.43 | 2.73 | 4.09 | 4.85 | 6.24 |
Interest coverage ratio is an important financial metric that indicates a company's ability to meet its interest obligations on its outstanding debt. A higher interest coverage ratio generally signifies a healthier financial position as it demonstrates the company's ability to comfortably cover its interest expenses with its earnings before interest and taxes (EBIT).
Analyzing Viad Corp.'s interest coverage ratio over the past eight quarters reveals fluctuations in the company's ability to cover its interest expenses. The interest coverage ratio ranged from a low of -1.55 in Q1 2022 to a high of 1.97 in Q4 2023.
A ratio below 1 indicates that the company's EBIT is insufficient to cover its interest charges, which could raise concerns about its financial stability and ability to service its debt. Viad Corp. experienced this situation in Q2 2022 and Q1 2022, with interest coverage ratios of 0.86 and -1.55, respectively. This suggests that during these periods, Viad Corp.'s earnings were insufficient to cover its interest expenses, which could potentially lead to financial distress and liquidity challenges.
On the other hand, Viad Corp.'s interest coverage improved in the latter quarters, with ratios above 1.5 in Q4 2022, Q1 2023, and Q4 2023. While the ratios indicate that the company's EBIT was able to cover its interest payments during these quarters, the ratios are still relatively low, suggesting a potential sensitivity to changes in earnings.
Overall, Viad Corp.'s interest coverage ratio fluctuated over the past eight quarters, indicating variability in the company's ability to cover its interest expenses with its operating income. Investors and creditors should closely monitor this ratio to assess Viad Corp.'s financial health and debt repayment capacity.