The Wendy’s Co (WEN)
Solvency ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 19.41 | 19.52 | 18.59 | 17.67 | 18.13 | 15.44 | 13.69 | 12.89 | 11.81 | 12.63 | 13.04 | 12.24 | 11.69 | 9.50 | 9.06 | 9.52 | 9.17 | 9.52 | 10.48 | 11.04 |
The solvency ratios of The Wendy’s Co indicate a strong financial position with consistently low levels of debt in relation to its assets, capital, and equity. The debt-to-assets ratio, debt-to-capital ratio, and debt-to-equity ratio have remained at 0.00 across all reporting periods from March 31, 2020, to December 31, 2024. This suggests that the company is not reliant on debt to finance its operations and has a low risk of insolvency.
The financial leverage ratio, which measures the company's ability to meet its financial obligations through debt financing, shows a slightly increasing trend over the same period. Starting at 11.04 on March 31, 2020, the ratio has gradually increased to 19.41 by December 31, 2024. While the increase in the financial leverage ratio may indicate a higher level of risk, it is important to note that this metric is still relatively low compared to industry benchmarks.
Overall, The Wendy’s Co's solvency ratios reflect a conservative financial strategy focused on maintaining a healthy balance sheet and minimizing financial risk. The company's ability to operate with minimal debt exposure positions it well to weather economic downturns and pursue future growth opportunities.
Coverage ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 3.20 | 3.19 | 3.26 | 3.29 | 3.25 | 3.15 | 3.06 | 2.87 | 2.81 | 2.68 | 2.54 | 2.64 | 2.69 | 2.80 | 2.84 | 2.59 | 2.41 | 2.17 | 2.11 | 2.28 |
Interest coverage measures a company's ability to meet its interest payments on outstanding debt. The Wendy's Co's interest coverage ratio has shown consistent improvement over the past few years, indicating a strengthening ability to cover its interest expenses.
As of December 31, 2024, The Wendy's Co's interest coverage ratio stood at 3.20, which means the company can cover its interest expenses 3.20 times over with its earnings before interest and taxes (EBIT). This reflects a positive trend in the company's financial health and suggests that it has a comfortable cushion to meet its interest obligations.
The steady increase in the interest coverage ratio from 2.28 in March 2020 to 3.20 in December 2024 indicates an improving financial position and a reduced risk of default on its debt commitments. This trend signifies that The Wendy's Co has been generating sufficient earnings to comfortably service its interest payments, which could be attractive to investors and creditors.
Overall, The Wendy's Co's interest coverage ratio portrays a favorable picture of its financial strength and ability to manage its debt obligations effectively.