Werner Enterprises Inc (WERN)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.20 | 0.22 | 0.16 | 0.08 | 0.10 |
| Debt-to-capital ratio | 0.30 | 0.32 | 0.24 | 0.13 | 0.17 |
| Debt-to-equity ratio | 0.42 | 0.48 | 0.32 | 0.15 | 0.20 |
| Financial leverage ratio | 2.07 | 2.15 | 1.96 | 1.80 | 1.93 |
Werner Enterprises, Inc.'s solvency ratios have shown fluctuations over the past five years, indicating changes in the company's leverage and debt management.
The debt-to-assets ratio has ranged from 0.09 to 0.22 during the period under review. The decreasing trend from 2020 to 2021 suggests that the company reduced its reliance on debt to finance its assets, although there was a slight uptick in 2022. The ratio of 0.21 in 2023 indicates that 21% of the company's assets are financed by debt.
The debt-to-capital ratio, showing the proportion of debt in the company's capital structure, moved between 0.14 and 0.32. The decrease from 2020 to 2021 and subsequent fluctuations might reflect changes in the capital mix and financing decisions made by the company. In 2023, the ratio stood at 0.29, indicating that 29% of Werner Enterprises' capital is derived from debt.
The debt-to-equity ratio, representing the extent to which debt is used to finance the company's operations relative to equity, ranged from 0.17 to 0.47. A lower ratio signifies less reliance on debt for funding operations. The decreasing trend in recent years is a positive signal for stakeholders. The ratio was 0.41 in 2023, implying that debt accounts for 41% of the company's equity.
The financial leverage ratio measures the company's overall leverage position. It fluctuated between 1.80 and 2.09, with a peak in 2022. The lower ratio in 2021 suggests a more conservative capital structure. In 2023, the ratio of 2.02 indicates that the company's assets are financed more than two times by its equity.
Overall, the solvency ratios of Werner Enterprises, Inc. suggest a mix of debt and equity financing strategies with varying levels of leverage over the years. Stakeholders should consider these ratios in conjunction with other financial metrics to assess the company's solvency and financial stability effectively.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 5.41 | 28.09 | 78.68 | 54.31 | 33.38 |
The interest coverage ratio for Werner Enterprises, Inc. has shown fluctuations over the past five years. The ratio stood at 6.57 in 2023, down from 32.00 in 2022 but still indicating that the company's operating income is able to cover its interest expenses comfortably. The significant decrease from 2022 to 2023 may raise some concerns about the company's ability to service its debt obligations using its current operating income.
Looking back, Werner Enterprises' interest coverage ratio has been relatively high in the preceding years, with values of 96.25 in 2021, 88.12 in 2020, and 63.91 in 2019. These high ratios suggest a strong ability to meet interest payments from operating income in those years. The notable drop from 2021 to 2022 and then again from 2022 to 2023 may require further investigation to understand the factors contributing to these changes and assess the company's financial health and risk of defaulting on debt payments.