Watsco Inc (WSO)
Solvency ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 1.00 | 1.68 | 1.68 | 1.72 | 1.70 | 1.82 | 2.01 | 1.97 | 1.85 | 1.88 | 2.07 | 2.01 | 1.85 | 1.88 | 1.99 | 1.81 | 1.68 | 1.78 | 1.83 | 1.84 |
Watsco Inc has consistently maintained a strong solvency position, as indicated by its low debt-to-assets, debt-to-capital, and debt-to-equity ratios of 0.00 across all reported periods up to December 31, 2024. These ratios suggest that the company has minimal reliance on debt to finance its operations and investments, highlighting a healthy financial structure with a low level of financial risk.
The financial leverage ratio, which measures the extent of a company's financial leverage, has shown some fluctuations over the years but generally remained at manageable levels. The ratio ranged between 1.68 to 2.07 during the reporting periods. While there was a slight increase in leverage in some quarters, overall, the company has demonstrated prudent financial management by maintaining the ratio within a reasonable range.
Overall, Watsco Inc's solvency ratios indicate a financially stable and robust position with a conservative approach to debt management, reflecting a sound financial strategy that prioritizes sustainability and risk mitigation.
Coverage ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 31.92 | 40.70 | 136.98 | 84.44 | 113.49 | 137.45 | 175.67 | 367.52 | 380.08 | 339.27 | 367.20 | 485.05 | 628.14 | 703.90 | 745.95 | 812.15 | 322.43 | 212.93 | 112.25 | 87.75 |
Watsco Inc's interest coverage ratio has experienced fluctuations over the past few years, as reflected in the data provided. The interest coverage ratio measures the company's ability to pay its interest expenses on outstanding debt with its operating income.
From March 31, 2020, to June 30, 2021, there was a consistent increase in the interest coverage ratio, indicating that Watsco Inc's operating income was comfortably covering its interest obligations. The ratio peaked at 812.15 on March 31, 2021, suggesting a strong financial position during that period.
However, starting from June 30, 2021, the interest coverage ratio began to decline gradually. By December 31, 2024, the ratio had dropped to 31.92, indicating a significant decrease in the company's ability to cover its interest expenses with operating income. This declining trend may raise concerns about Watsco Inc's financial health and its ability to meet its debt obligations in the future.
It would be advisable for stakeholders and investors to closely monitor Watsco Inc's interest coverage ratio and assess the company's ability to generate sufficient operating income to service its debt in the long term.