The Wendy’s Co (WEN)

The solvency ratios of The Wendy's Co, namely the Debt-to-assets ratio, Debt-to-capital ratio, Debt-to-equity ratio, and Financial leverage ratio have remained consistently low over the years from 2020 to 2024.

The Debt-to-assets ratio measures the proportion of a company's assets that are financed by debt. With a ratio of 0.00 for each year, it indicates that the company has not relied on debt to finance its assets, which can be seen as a positive sign of financial health and stability.

The Debt-to-capital ratio also stands at 0.00 for each year, suggesting that The Wendy's Co has not heavily leveraged its capital structure with debt, further reinforcing the company's financial stability.

Similarly, the Debt-to-equity ratio, which evaluates the extent to which debt is used to finance operations compared to equity, remains at 0.00 for all years. This implies that the company has maintained a balanced mix of debt and equity without being overly reliant on debt financing.

The Financial leverage ratio, which provides insight into the proportion of a company's equity to its debt, has shown a slight increase over the years, from 9.17 in 2020 to 19.41 in 2024. This increase suggests a higher reliance on debt financing relative to equity, but the ratio remains at a moderate level overall.

In summary, The Wendy's Co demonstrates strong solvency and financial stability, as indicated by consistently low debt ratios and a moderate financial leverage ratio throughout the years analyzed.

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Coverage ratios

The interest coverage ratio for The Wendy's Co has shown a consistent upward trend over the past five years. Starting at 2.17 in December 31, 2020, it has steadily increased to 3.20 by December 31, 2024. This indicates that the company's ability to cover its interest payments with its operating income has improved over the years. A higher interest coverage ratio is generally seen as a positive sign, suggesting that the company is in a better position to meet its interest obligations comfortably. The company's increasing interest coverage ratio reflects a strengthening financial position in terms of its ability to service its debt and may be indicative of improved profitability and operational efficiency.