The Wendy’s Co (WEN)

Wendy's Co solvency ratios show a consistent trend of increasing leverage over the past five years, indicating a higher reliance on debt to finance its operations and investments. The debt-to-assets ratio has progressively risen from 0.56 in 2019 to 0.65 in 2023, reflecting an increase in the proportion of assets financed by debt. Similarly, the debt-to-capital ratio has steadily increased from 0.84 in 2019 to 0.92 in 2023, showcasing a rise in the proportion of capital provided by debt.

The debt-to-equity ratio has also shown a significant escalation from 5.37 in 2019 to 10.82 in 2023, suggesting a higher level of financial risk and leverage. Moreover, the financial leverage ratio has increased from 9.67 in 2019 to 16.73 in 2023, indicating a substantial growth in the company's reliance on debt financing.

Overall, the solvency ratios of Wendy's Co demonstrate a trend towards greater financial leverage and reliance on debt, which may pose risks in terms of debt servicing capabilities and financial stability. Investors and stakeholders should closely monitor these ratios to assess the company's ability to manage its debt levels effectively and sustain its financial health in the long term.

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Coverage ratios

The interest coverage ratio of Wendy's Co has shown some fluctuation over the past five years. The ratio was 3.07 as of December 31, 2023, which indicates that the company generated 3.07 times more operating income than the interest expenses for that period. This shows an improvement compared to the previous year's ratio of 2.93. However, in general, the company's ability to cover its interest expenses has varied over the years. It reached its highest level at 3.15 in January 2, 2022, and its lowest level at 2.46 in December 29, 2019. The fluctuations in the interest coverage ratio suggest that Wendy's Co may have experienced changes in its operating performance and financial health during these periods, impacting its ability to cover interest expenses effectively.