Wingstop Inc (WING)

The solvency ratios of Wingstop Inc provide insights into the company's ability to meet its long-term financial obligations and its overall financial health.

1. Debt-to-assets ratio: This ratio measures the proportion of a company's assets financed by debt. The trend in Wingstop's debt-to-assets ratio shows a slight decrease from 2.21 in 2020 to 1.68 in 2024. A declining trend in this ratio indicates that the company is relying less on debt to finance its assets over time, which could lead to improved financial stability.

2. Debt-to-capital ratio: The debt-to-capital ratio reflects the percentage of a company's capital structure that is financed by debt. Wingstop's debt-to-capital ratio has decreased from 3.72 in 2020 to 2.27 in 2024. This declining trend indicates that the company is becoming less reliant on debt financing relative to its total capital, which can lower financial risk.

3. Debt-to-equity ratio: The absence of data for the debt-to-equity ratio for Wingstop suggests that the company may not have any long-term debt or may not be using equity financing as part of its capital structure during the period analyzed.

4. Financial leverage ratio: Similarly, the financial leverage ratio is not available for Wingstop across the years reviewed. Typically, this ratio measures the extent to which a company is using debt to support its operations, and the lack of data may indicate that Wingstop's financial leverage is not significant during this period.

Overall, the declining trends in the debt-to-assets ratio and debt-to-capital ratio suggest that Wingstop Inc is gradually reducing its reliance on debt financing, which could positively impact the company's financial stability and long-term solvency. Additional ratios, such as the debt-to-equity ratio and financial leverage ratio, could provide further insights into the company's capital structure and leverage levels.

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Coverage ratios

Interest coverage ratio indicates the ability of Wingstop Inc to meet its interest obligations from its earnings before interest and taxes. From the provided data, Wingstop's interest coverage has shown a positive trend over the years, increasing from 3.42 in December 2020 to 7.78 in December 2024. This improvement signifies that Wingstop's earnings are more than sufficient to cover its interest expenses, indicating a stronger financial position and lower risk of defaulting on its interest payments. Overall, Wingstop's increasing interest coverage ratios demonstrate a healthy financial performance and an improving capacity to service debt obligations.