Cactus Inc (WHD)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 1.76 | 1.96 | 2.10 | 2.31 | 2.55 |
Cactus Inc's solvency ratios depict a consistent trend of low debt levels relative to its assets, capital, and equity over the five-year period from 2019 to 2023. The debt-to-assets, debt-to-capital, and debt-to-equity ratios have remained at 0.00 throughout this period, indicating that the company has not relied heavily on debt financing to support its operations or growth.
However, the financial leverage ratio, which measures the extent to which a company is using debt to finance its operations, has shown an increasing trend over the same period. The financial leverage ratio has increased from 1.76 in 2019 to 2.55 in 2023. This indicates that Cactus Inc has been using more debt to fund its operations and investments relative to its equity.
While the low debt ratios may signify a conservative approach to financing, the increasing financial leverage ratio suggests a shift towards higher reliance on debt financing in recent years. It is important for stakeholders to monitor this trend closely to assess the potential implications on the company's financial stability and risk profile.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 46.20 | 164.39 | 78.65 | 73.03 | 135.07 |
Cactus Inc's interest coverage ratio has been quite stable over the past five years, with a significant variation observed between the years. In 2023, the interest coverage ratio dropped to 46.20, signaling a decrease in the company's ability to cover its interest expenses with its operating income. This may be a cause for concern as it indicates a lower margin of safety for the company's ability to service its debt obligations.
In contrast, the interest coverage ratio was significantly higher in 2022 at 164.39, indicating a strong ability to cover interest payments with operating income. This suggests a healthy financial position for the company in that particular year. The ratios for 2021, 2020, and 2019 were also above 70, showing a consistent ability to comfortably cover interest expenses in those years.
Overall, fluctuations in the interest coverage ratio can be influenced by various factors such as changes in interest rates, levels of operating income, and the amount of debt the company carries. Analysts and investors may closely monitor Cactus Inc's interest coverage ratio to assess the company's financial health and its ability to meet its debt obligations in the future.