XPO Logistics Inc (XPO)
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 | 0.43 | 0.42 | 0.43 | 0.44 | 0.45 | 0.38 | 0.39 | 0.39 | 0.39 | 0.33 | 0.33 | 0.31 | 0.40 | 0.41 | 0.33 | 0.34 | 0.32 | 0.42 | 0.44 | 0.40 |
| Debt-to-capital ratio | 0.67 | 0.67 | 0.69 | 0.71 | 0.72 | 0.67 | 0.69 | 0.70 | 0.71 | 0.61 | 0.63 | 0.64 | 0.76 | 0.78 | 0.64 | 0.65 | 0.66 | 0.71 | 0.74 | 0.69 |
| Debt-to-equity ratio | 2.08 | 2.04 | 2.22 | 2.49 | 2.63 | 2.04 | 2.19 | 2.35 | 2.44 | 1.59 | 1.67 | 1.80 | 3.09 | 3.46 | 1.77 | 1.86 | 1.93 | 2.47 | 2.79 | 2.24 |
| Financial leverage ratio | 4.82 | 4.83 | 5.16 | 5.71 | 5.92 | 5.37 | 5.68 | 6.02 | 6.19 | 4.76 | 5.06 | 5.83 | 7.66 | 8.40 | 5.32 | 5.54 | 5.97 | 5.94 | 6.30 | 5.65 |
The solvency ratios of XPO Logistics Inc indicate the company's ability to meet its long-term debt obligations.
1. Debt-to-assets ratio: This ratio shows the proportion of the company's assets financed by debt. XPO Logistics' debt-to-assets ratio has ranged between 0.31 and 0.45 over the past few years, with a decreasing trend in recent quarters. A lower ratio indicates that the company has less reliance on debt to finance its assets.
2. Debt-to-capital ratio: This ratio measures the proportion of the company's capital that is financed by debt. XPO Logistics' debt-to-capital ratio has fluctuated between 0.61 and 0.78, displaying some variability but with a general downward trend in recent periods. A decreasing ratio suggests a decreasing reliance on debt to fund the company's operations.
3. Debt-to-equity ratio: This ratio compares the company's total debt to its shareholder equity and indicates the extent to which shareholders' equity could cover the company's debt in the event of a financial downturn. XPO Logistics' debt-to-equity ratio has shown variability between 1.59 and 3.46, with a downward trend in recent quarters. A declining ratio signifies a stronger equity position relative to debt.
4. Financial leverage ratio: This ratio measures the extent to which the company is using debt to finance its operations. XPO Logistics' financial leverage ratio has ranged between 4.76 and 8.40, displaying fluctuations but with a decreasing trend in recent periods. A lower financial leverage ratio indicates less reliance on debt financing, which may reduce the company's financial risk.
Overall, the solvency ratios suggest that XPO Logistics Inc has been working towards reducing its reliance on debt to finance its operations, which is a positive sign for the company's long-term financial stability and ability to meet its debt obligations.
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 | 3.00 | 3.02 | 3.15 | 2.79 | 2.53 | 1.59 | 1.89 | 2.87 | 6.48 | 7.51 | 5.46 | 4.87 | 2.64 | 2.48 | 2.93 | 1.53 | 1.20 | 1.08 | 1.23 | 2.66 |
Interest coverage ratio measures the ability of a company to meet its interest obligations using its operating income. A higher interest coverage ratio is generally seen as positive, indicating that the company generates sufficient earnings to cover interest expenses.
Looking at the data for XPO Logistics Inc, we observe fluctuations in the interest coverage ratio over the quarters analyzed. The interest coverage ratio improved from March 31, 2020, at 2.66, to reach a peak of 7.51 on September 30, 2022. This upward trend indicates an improvement in XPO Logistics' ability to meet its interest payments with its operating income.
However, the ratio started to decline after September 30, 2022, and fluctuated around the range of 1.50 to 3.00 until December 31, 2024. While the interest coverage ratio remained above 1, indicating that the company was able to cover its interest expenses, the declining trend suggests a potential decrease in the company's ability to comfortably meet its interest obligations in the later quarters.
Overall, XPO Logistics Inc's interest coverage ratio has shown variability over the quarters, with notable peaks and troughs. Further analysis of the company's financial performance and potential strategies to maintain or improve its interest coverage would provide more insights into its financial health and sustainability.