Williams Companies Inc (WMB)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.49 | 0.47 | 0.58 | 0.61 | 0.55 |
| Debt-to-capital ratio | 0.67 | 0.66 | 0.71 | 0.70 | 0.65 |
| Debt-to-equity ratio | 2.07 | 1.96 | 2.43 | 2.30 | 1.89 |
| Financial leverage ratio | 4.24 | 4.22 | 4.17 | 3.75 | 3.45 |
The solvency ratios of Williams Cos Inc indicate the company's ability to meet its long-term debt obligations and the extent of its leverage.
1. Debt-to-assets ratio:
The debt-to-assets ratio shows the proportion of the company's assets financed by debt. Williams Cos Inc's debt-to-assets ratio has been relatively stable over the past five years, ranging from 0.47 to 0.51. This suggests that around 47% to 51% of the company's assets are funded by debt.
2. Debt-to-capital ratio:
The debt-to-capital ratio measures the percentage of a company's capital structure that is financed by debt. Williams Cos Inc's debt-to-capital ratio has been steadily increasing from 0.63 in 2019 to 0.68 in 2023. This indicates that debt funding has become a larger component of the company's overall capital structure over the years.
3. Debt-to-equity ratio:
The debt-to-equity ratio reflects the company's financial leverage and the extent to which it relies on debt financing. Williams Cos Inc's debt-to-equity ratio has shown an increasing trend from 1.67 in 2019 to 2.13 in 2023. This suggests that the company has been relying more on debt relative to equity to finance its operations and growth.
4. Financial leverage ratio:
The financial leverage ratio indicates the extent to which the company is using debt to finance its assets. Williams Cos Inc's financial leverage ratio has been on an upward trajectory over the past five years, increasing from 3.45 in 2019 to 4.24 in 2023. This suggests that the company has been increasingly using debt to fund its operations and investments.
Overall, the analysis of Williams Cos Inc's solvency ratios indicates a trend of increasing reliance on debt financing over the years, which may pose risks related to debt repayment and interest costs. Investors and creditors should carefully monitor the company's debt management strategies to assess its long-term financial stability.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 4.39 | 3.16 | 2.72 | 1.25 | 2.00 |
The interest coverage ratio of Williams Cos Inc has shown a generally increasing trend over the past five years, which is a positive sign. The ratio has improved from 2.34 in 2019 to 4.10 in 2023, indicating the company's ability to meet its interest obligations has strengthened over this period.
An interest coverage ratio of 4.10 in 2023 means that Williams Cos Inc earned 4.1 times the amount needed to cover its interest expenses for the year, showcasing the company's strong financial health. This improvement may suggest better operational performance, increased profitability, or effective management of debt levels.
Overall, the upward trend in the interest coverage ratio indicates that Williams Cos Inc has been more than comfortably able to cover its interest payments in recent years, which could be viewed positively by investors and creditors as a measure of the company's financial stability and ability to manage its debt obligations.