Watsco Inc (WSO)

Solvency ratios

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 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Debt-to-assets ratio 0.00 0.03 0.08 0.05 0.00 0.00 0.05 0.08 0.03 0.00 0.04 0.02 0.00 0.00 0.01 0.06 0.06 0.06 0.08 0.06
Debt-to-capital ratio 0.01 0.05 0.14 0.09 0.00 0.00 0.10 0.13 0.05 0.00 0.07 0.03 0.00 0.00 0.02 0.10 0.10 0.11 0.14 0.09
Debt-to-equity ratio 0.01 0.05 0.17 0.10 0.00 0.00 0.11 0.15 0.05 0.00 0.07 0.03 0.00 0.00 0.02 0.11 0.11 0.12 0.16 0.10
Financial leverage ratio 1.67 1.82 2.01 1.97 1.85 1.88 2.07 2.01 1.85 1.88 1.99 1.81 1.67 1.78 1.83 1.84 1.78 1.87 1.94 1.80

Watsco Inc.'s solvency ratios provide insights into the company's ability to meet its long-term financial obligations. The debt-to-assets ratio shows that the company has a relatively low level of debt compared to its total assets. Starting at 0.03 in Q4 2022, the ratio has increased to 0.11 in Q2 2023 before decreasing to 0.08 in Q1 2023.

The debt-to-capital ratio and debt-to-equity ratio both reflect the company's debt as a proportion of its total capital and equity, respectively. Watsco Inc. has maintained these ratios at moderate levels over the quarters, indicating a balanced approach towards leveraging. The debt-to-capital ratio ranges from 0.05 to 0.18, while the debt-to-equity ratio ranges from 0.06 to 0.22 during the observed period.

Furthermore, the financial leverage ratio, which measures the company's reliance on debt to finance its operations, has remained relatively stable around the 1.85 to 2.07 range. This suggests that while the company has utilized debt, it has not significantly increased its leverage over the quarters.

Overall, Watsco Inc.'s solvency ratios demonstrate prudent management of debt levels, maintaining a healthy balance between debt and assets, capital, and equity. The consistent performance of these ratios indicates a stable financial position and a systematic approach to managing long-term obligations.

Coverage ratios

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 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Interest coverage 161.55 138.90 177.57 371.41 384.10 342.04 370.31 489.56 631.05 705.80 748.16 815.03 323.68 214.02 112.88 83.85 84.42 91.58 101.12 117.32

Watsco Inc.'s interest coverage ratio has been relatively consistent and strong, consistently above 100 in all the quarters shown. The interest coverage ratio measures the company's ability to meet its interest obligations with its operating income.

The interest coverage ratio has fluctuated over the quarters, ranging from a low of 138.38 in Q3 2023 to a high of 489.99 in Q1 2022. These fluctuations could indicate changes in the company's operating income and interest expenses.

The significant increase in interest coverage in Q1 2023 to 371.59 and 489.99 in Q1 2022 suggests that the company was able to cover its interest expenses more comfortably during those periods. However, the decrease in Q3 2023 to 138.38 could be a point of concern, indicating a potential decrease in profitability or a rise in interest expenses during that quarter.

Overall, Watsco Inc.'s interest coverage ratios reflect a healthy financial position, with the company consistently generating enough operating income to cover its interest expenses. Monitoring this ratio is important to ensure that the company can continue to meet its interest obligations in the future.