Analysis of Solvency Ratios
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
Debt Ratios
Coverage Ratios
Old Dominion Freight Line Inc., solvency ratios
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
The solvency profile is characterized by an exceptionally conservative approach to leverage and a robust capacity to meet long-term obligations. Throughout the analyzed period, the organization maintained minimal reliance on external debt, ensuring a high degree of financial stability and low insolvency risk.
- Debt-to-Equity and Debt-to-Capital Ratios
- The debt-to-equity and debt-to-capital ratios remained consistently low, fluctuating minimally between 0.01 and 0.03. This stability indicates a capital structure heavily weighted toward equity rather than borrowed funds, reflecting a low-risk financing strategy.
- Impact of Operating Lease Liabilities
- The inclusion of operating lease liabilities results in a marginal increase across all related solvency metrics. The debt-to-equity ratio including leases rose from 0.02 in 2018 to a peak of 0.06 in 2020 and 2021, before settling at 0.05 in 2022. Similarly, the debt-to-assets ratio including leases increased from 0.01 in 2018 to 0.04 in 2022. This suggests that lease obligations constitute a more significant portion of the organization's liabilities than traditional interest-bearing debt.
- Interest and Fixed Charge Coverage
- The interest coverage ratio exhibits significant volatility while remaining at an exceptionally high absolute level. A sharp decline was observed from 4,315.88 in 2018 to a low of 325.00 in 2020, followed by a recovery to 1,179.09 by 2022. Fixed charge coverage followed a similar trajectory, dipping to 48.99 in 2020 before rising to 86.39 in 2022. These figures indicate that earnings are more than sufficient to cover all fixed financial obligations.
- Financial Leverage
- The financial leverage ratio remained remarkably stable, ranging only between 1.30 and 1.32 over the five-year period. This consistency suggests a disciplined approach to asset financing and a steady relationship between total assets and equity.
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Debt to Equity
Old Dominion Freight Line Inc., debt to equity calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current maturities of long-term debt | 20,000) | —) | —) | —) | —) | |
| Long-term debt, excluding current maturities | 79,963) | 99,947) | 99,931) | 45,000) | 45,000) | |
| Total debt | 99,963) | 99,947) | 99,931) | 45,000) | 45,000) | |
| Shareholders’ equity | 3,652,917) | 3,679,807) | 3,326,288) | 3,080,717) | 2,680,483) | |
| Solvency Ratio | ||||||
| Debt to equity1 | 0.03 | 0.03 | 0.03 | 0.01 | 0.02 | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| FedEx Corp. | 0.81 | 0.86 | — | — | — | |
| Uber Technologies Inc. | 1.32 | 0.66 | — | — | — | |
| Union Pacific Corp. | 2.74 | 2.10 | — | — | — | |
| United Airlines Holdings Inc. | 4.68 | 7.03 | — | — | — | |
| United Parcel Service Inc. | 0.99 | 1.54 | — | — | — | |
| Debt to Equity, Sector | ||||||
| Transportation | 1.62 | 1.63 | — | — | — | |
| Debt to Equity, Industry | ||||||
| Industrials | 1.42 | 1.37 | — | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Debt to equity = Total debt ÷ Shareholders’ equity
= 99,963 ÷ 3,652,917 = 0.03
2 Click competitor name to see calculations.
The solvency profile from 2018 to 2022 reflects a highly conservative approach to leverage, characterized by minimal reliance on debt relative to the total equity base.
- Total Debt Trends
- Total debt remained constant at 45,000 thousand USD between 2018 and 2019, followed by a significant increase to 99,931 thousand USD in 2020. From 2020 through 2022, the debt level stabilized, showing negligible fluctuations and ending the period at 99,963 thousand USD.
- Shareholders' Equity Growth
- A steady upward trajectory in shareholders' equity was observed from 2018, when it stood at 2,680,483 thousand USD, peaking in 2021 at 3,679,807 thousand USD. A marginal decrease occurred in 2022, with equity settling at 3,652,917 thousand USD.
- Debt to Equity Ratio Analysis
- The debt to equity ratio remained exceptionally low throughout the five-year period, fluctuating within a narrow range of 0.01 to 0.03. Despite the doubling of total debt in 2020, the ratio only shifted from 0.01 in 2019 to 0.03 in 2020 and remained constant through 2022. This indicates that the growth in equity effectively offset the increase in debt, maintaining a strong solvency position and minimal financial risk.
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Debt to Equity (including Operating Lease Liability)
Old Dominion Freight Line Inc., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current maturities of long-term debt | 20,000) | —) | —) | —) | —) | |
| Long-term debt, excluding current maturities | 79,963) | 99,947) | 99,931) | 45,000) | 45,000) | |
| Total debt | 99,963) | 99,947) | 99,931) | 45,000) | 45,000) | |
| Current operating lease liabilities (presented within Other accrued liabilities) | 17,300) | 14,000) | 13,000) | 10,400) | —) | |
| Non-current operating lease liabilities (presented within Other non-current liabilities) | 80,800) | 88,800) | 93,300) | 56,100) | —) | |
| Total debt (including operating lease liability) | 198,063) | 202,747) | 206,231) | 111,500) | 45,000) | |
| Shareholders’ equity | 3,652,917) | 3,679,807) | 3,326,288) | 3,080,717) | 2,680,483) | |
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | 0.05 | 0.06 | 0.06 | 0.04 | 0.02 | |
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| FedEx Corp. | 1.49 | 1.51 | — | — | — | |
| Uber Technologies Inc. | 1.58 | 0.79 | — | — | — | |
| Union Pacific Corp. | 2.87 | 2.22 | — | — | — | |
| United Airlines Holdings Inc. | 5.41 | 8.17 | — | — | — | |
| United Parcel Service Inc. | 1.19 | 1.79 | — | — | — | |
| Debt to Equity (including Operating Lease Liability), Sector | ||||||
| Transportation | 2.03 | 2.02 | — | — | — | |
| Debt to Equity (including Operating Lease Liability), Industry | ||||||
| Industrials | 1.59 | 1.54 | — | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Shareholders’ equity
= 198,063 ÷ 3,652,917 = 0.05
2 Click competitor name to see calculations.
The solvency profile reflects a highly conservative approach to leverage, characterized by minimal reliance on borrowed capital relative to equity holdings between 2018 and 2022.
- Total Debt Trends
- Total debt, including operating lease liabilities, experienced a significant increase from US$ 45 million in 2018 to a peak of US$ 206.2 million in 2020. Following this peak, debt levels stabilized and began a marginal downward trend, concluding at US$ 198.1 million by the end of 2022.
- Shareholders' Equity Growth
- Equity demonstrated a consistent upward trajectory from 2018 through 2021, increasing from US$ 2.68 billion to US$ 3.68 billion. A slight contraction occurred in 2022, with equity settling at US$ 3.65 billion, although the overall growth over the five-year period remains substantial.
- Debt to Equity Ratio Interpretation
- The debt to equity ratio remained exceptionally low throughout the observed period, indicating a capital structure dominated by equity. Although the ratio increased from 0.02 in 2018 to a peak of 0.06 in 2020 and 2021, it retracted slightly to 0.05 in 2022. This consistently low ratio suggests an extremely low risk of insolvency and a strong capacity to meet long-term obligations.
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Debt to Capital
Old Dominion Freight Line Inc., debt to capital calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current maturities of long-term debt | 20,000) | —) | —) | —) | —) | |
| Long-term debt, excluding current maturities | 79,963) | 99,947) | 99,931) | 45,000) | 45,000) | |
| Total debt | 99,963) | 99,947) | 99,931) | 45,000) | 45,000) | |
| Shareholders’ equity | 3,652,917) | 3,679,807) | 3,326,288) | 3,080,717) | 2,680,483) | |
| Total capital | 3,752,880) | 3,779,754) | 3,426,219) | 3,125,717) | 2,725,483) | |
| Solvency Ratio | ||||||
| Debt to capital1 | 0.03 | 0.03 | 0.03 | 0.01 | 0.02 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| FedEx Corp. | 0.45 | 0.46 | — | — | — | |
| Uber Technologies Inc. | 0.57 | 0.40 | — | — | — | |
| Union Pacific Corp. | 0.73 | 0.68 | — | — | — | |
| United Airlines Holdings Inc. | 0.82 | 0.88 | — | — | — | |
| United Parcel Service Inc. | 0.50 | 0.61 | — | — | — | |
| Debt to Capital, Sector | ||||||
| Transportation | 0.62 | 0.62 | — | — | — | |
| Debt to Capital, Industry | ||||||
| Industrials | 0.59 | 0.58 | — | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Debt to capital = Total debt ÷ Total capital
= 99,963 ÷ 3,752,880 = 0.03
2 Click competitor name to see calculations.
The solvency profile remains exceptionally strong, characterized by minimal reliance on debt relative to total capital over the five-year period ending December 31, 2022.
- Total Debt Trends
- Total debt remained static at 45 million USD through 2019, followed by a significant increase to approximately 99.9 million USD in 2020. This figure remained virtually unchanged through 2021 and 2022, indicating a stabilization of debt obligations after the 2020 increase.
- Total Capital Growth
- Total capital exhibited a consistent upward trajectory from 2.73 billion USD in 2018 to a peak of 3.78 billion USD in 2021. A slight contraction occurred in 2022, with capital ending at 3.75 billion USD, though the overall trend reflects a substantial expansion of the company's total capital base.
- Debt to Capital Ratio Analysis
- The debt to capital ratio fluctuated within a very narrow range between 0.01 and 0.03. Despite the doubling of total debt in 2020, the ratio only increased marginally from 0.01 in 2019 to 0.03 in 2020, and remained constant at 0.03 through 2022. This suggests that the increase in debt was heavily diluted by the concurrent growth in total capital, maintaining a conservative financial structure with negligible leverage.
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Debt to Capital (including Operating Lease Liability)
Old Dominion Freight Line Inc., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current maturities of long-term debt | 20,000) | —) | —) | —) | —) | |
| Long-term debt, excluding current maturities | 79,963) | 99,947) | 99,931) | 45,000) | 45,000) | |
| Total debt | 99,963) | 99,947) | 99,931) | 45,000) | 45,000) | |
| Current operating lease liabilities (presented within Other accrued liabilities) | 17,300) | 14,000) | 13,000) | 10,400) | —) | |
| Non-current operating lease liabilities (presented within Other non-current liabilities) | 80,800) | 88,800) | 93,300) | 56,100) | —) | |
| Total debt (including operating lease liability) | 198,063) | 202,747) | 206,231) | 111,500) | 45,000) | |
| Shareholders’ equity | 3,652,917) | 3,679,807) | 3,326,288) | 3,080,717) | 2,680,483) | |
| Total capital (including operating lease liability) | 3,850,980) | 3,882,554) | 3,532,519) | 3,192,217) | 2,725,483) | |
| Solvency Ratio | ||||||
| Debt to capital (including operating lease liability)1 | 0.05 | 0.05 | 0.06 | 0.03 | 0.02 | |
| Benchmarks | ||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||
| FedEx Corp. | 0.60 | 0.60 | — | — | — | |
| Uber Technologies Inc. | 0.61 | 0.44 | — | — | — | |
| Union Pacific Corp. | 0.74 | 0.69 | — | — | — | |
| United Airlines Holdings Inc. | 0.84 | 0.89 | — | — | — | |
| United Parcel Service Inc. | 0.54 | 0.64 | — | — | — | |
| Debt to Capital (including Operating Lease Liability), Sector | ||||||
| Transportation | 0.67 | 0.67 | — | — | — | |
| Debt to Capital (including Operating Lease Liability), Industry | ||||||
| Industrials | 0.61 | 0.61 | — | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 198,063 ÷ 3,850,980 = 0.05
2 Click competitor name to see calculations.
The solvency profile of Old Dominion Freight Line Inc. indicates a highly conservative approach to leverage between 2018 and 2022. Despite an increase in absolute debt levels, the organization maintained a minimal reliance on borrowed funds relative to its total capital base.
- Total Debt Trends
- A significant upward trajectory in total debt, including operating lease liabilities, occurred between 2018 and 2020, with the balance rising from US$ 45 million to a peak of approximately US$ 206.2 million. Following this period of growth, debt levels stabilized and exhibited a slight contraction to US$ 198.1 million by the end of 2022.
- Total Capital Growth
- Total capital demonstrated consistent year-over-year growth from 2018 through 2021, increasing from US$ 2.73 billion to US$ 3.88 billion. A marginal decrease was noted in 2022, with total capital settling at US$ 3.85 billion.
- Debt to Capital Ratio Analysis
- The debt to capital ratio remained exceptionally low throughout the five-year period. The ratio increased from 0.02 in 2018 to a peak of 0.06 in 2020, before stabilizing at 0.05 in both 2021 and 2022. This trend indicates that debt constitutes a very small fraction of the total capital structure, reflecting high solvency and low financial risk.
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Debt to Assets
Old Dominion Freight Line Inc., debt to assets calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current maturities of long-term debt | 20,000) | —) | —) | —) | —) | |
| Long-term debt, excluding current maturities | 79,963) | 99,947) | 99,931) | 45,000) | 45,000) | |
| Total debt | 99,963) | 99,947) | 99,931) | 45,000) | 45,000) | |
| Total assets | 4,838,610) | 4,821,544) | 4,369,410) | 3,995,568) | 3,545,283) | |
| Solvency Ratio | ||||||
| Debt to assets1 | 0.02 | 0.02 | 0.02 | 0.01 | 0.01 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| FedEx Corp. | 0.24 | 0.25 | — | — | — | |
| Uber Technologies Inc. | 0.30 | 0.25 | — | — | — | |
| Union Pacific Corp. | 0.51 | 0.47 | — | — | — | |
| United Airlines Holdings Inc. | 0.48 | 0.52 | — | — | — | |
| United Parcel Service Inc. | 0.28 | 0.32 | — | — | — | |
| Debt to Assets, Sector | ||||||
| Transportation | 0.36 | 0.36 | — | — | — | |
| Debt to Assets, Industry | ||||||
| Industrials | 0.31 | 0.30 | — | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Debt to assets = Total debt ÷ Total assets
= 99,963 ÷ 4,838,610 = 0.02
2 Click competitor name to see calculations.
An analysis of the solvency metrics from 2018 to 2022 reveals an exceptionally conservative financial structure characterized by minimal leverage and steady asset growth.
- Total Debt Trends
- Total debt remained static at 45 million USD between 2018 and 2019, followed by a sharp increase to approximately 99.9 million USD in 2020. Following this shift, debt levels remained virtually unchanged through 2021 and 2022, indicating a stabilized borrowing level.
- Total Asset Growth
- A consistent upward trajectory is observed in total assets, which grew from 3.5 billion USD in 2018 to 4.8 billion USD by the end of 2022. This represents a sustained expansion of the balance sheet over the five-year period.
- Debt to Assets Ratio Analysis
- The debt to assets ratio remained negligible throughout the analyzed period, moving from 0.01 in 2018 and 2019 to 0.02 in 2020, 2021, and 2022. This indicates that the company maintains an extremely low reliance on debt to finance its assets, ensuring a high level of solvency and minimal financial risk.
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Debt to Assets (including Operating Lease Liability)
Old Dominion Freight Line Inc., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current maturities of long-term debt | 20,000) | —) | —) | —) | —) | |
| Long-term debt, excluding current maturities | 79,963) | 99,947) | 99,931) | 45,000) | 45,000) | |
| Total debt | 99,963) | 99,947) | 99,931) | 45,000) | 45,000) | |
| Current operating lease liabilities (presented within Other accrued liabilities) | 17,300) | 14,000) | 13,000) | 10,400) | —) | |
| Non-current operating lease liabilities (presented within Other non-current liabilities) | 80,800) | 88,800) | 93,300) | 56,100) | —) | |
| Total debt (including operating lease liability) | 198,063) | 202,747) | 206,231) | 111,500) | 45,000) | |
| Total assets | 4,838,610) | 4,821,544) | 4,369,410) | 3,995,568) | 3,545,283) | |
| Solvency Ratio | ||||||
| Debt to assets (including operating lease liability)1 | 0.04 | 0.04 | 0.05 | 0.03 | 0.01 | |
| Benchmarks | ||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||
| FedEx Corp. | 0.43 | 0.44 | — | — | — | |
| Uber Technologies Inc. | 0.36 | 0.29 | — | — | — | |
| Union Pacific Corp. | 0.53 | 0.50 | — | — | — | |
| United Airlines Holdings Inc. | 0.55 | 0.60 | — | — | — | |
| United Parcel Service Inc. | 0.33 | 0.37 | — | — | — | |
| Debt to Assets (including Operating Lease Liability), Sector | ||||||
| Transportation | 0.45 | 0.45 | — | — | — | |
| Debt to Assets (including Operating Lease Liability), Industry | ||||||
| Industrials | 0.34 | 0.34 | — | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 198,063 ÷ 4,838,610 = 0.04
2 Click competitor name to see calculations.
The analysis of solvency metrics from 2018 to 2022 indicates a conservative approach to leverage, characterized by a consistently low reliance on debt to finance the asset base.
- Total Debt Trajectory
- A notable increase in total debt, including operating lease liabilities, was observed between 2018 and 2020, where obligations rose from $45 million to a peak of $206.2 million. Subsequent to 2020, debt levels plateaued and experienced a slight contraction, ending at $198.1 million in 2022.
- Total Asset Expansion
- Total assets demonstrated a steady and uninterrupted growth pattern over the five-year period. The asset base expanded from $3.55 billion in 2018 to $4.84 billion by the end of 2022, reflecting a consistent increase in the company's total resources.
- Debt to Assets Ratio Analysis
- The debt-to-assets ratio remained minimal throughout the period, starting at 0.01 in 2018 and peaking at 0.05 in 2020. The ratio then stabilized at 0.04 for both 2021 and 2022. This indicates that debt represents a very small fraction of the total asset value, suggesting a high degree of solvency and low financial risk.
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Financial Leverage
Old Dominion Freight Line Inc., financial leverage calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Total assets | 4,838,610) | 4,821,544) | 4,369,410) | 3,995,568) | 3,545,283) | |
| Shareholders’ equity | 3,652,917) | 3,679,807) | 3,326,288) | 3,080,717) | 2,680,483) | |
| Solvency Ratio | ||||||
| Financial leverage1 | 1.32 | 1.31 | 1.31 | 1.30 | 1.32 | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| FedEx Corp. | 3.45 | 3.43 | — | — | — | |
| Uber Technologies Inc. | 4.37 | 2.68 | — | — | — | |
| Union Pacific Corp. | 5.38 | 4.49 | — | — | — | |
| United Airlines Holdings Inc. | 9.77 | 13.56 | — | — | — | |
| United Parcel Service Inc. | 3.59 | 4.87 | — | — | — | |
| Financial Leverage, Sector | ||||||
| Transportation | 4.53 | 4.48 | — | — | — | |
| Financial Leverage, Industry | ||||||
| Industrials | 4.65 | 4.52 | — | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Financial leverage = Total assets ÷ Shareholders’ equity
= 4,838,610 ÷ 3,652,917 = 1.32
2 Click competitor name to see calculations.
The financial position between 2018 and 2022 is characterized by a consistent expansion of the asset base and a remarkably stable capital structure. Total assets grew steadily over the period, increasing from US$ 3.55 billion in 2018 to US$ 4.84 billion by the end of 2022.
- Asset and Equity Growth Trends
- A continuous upward trajectory in total assets was observed from 2018 through 2021, with growth moderating significantly in 2022. Shareholders' equity followed a similar growth pattern, rising from US$ 2.68 billion in 2018 to a peak of US$ 3.68 billion in 2021, before experiencing a slight contraction to US$ 3.65 billion in 2022.
- Financial Leverage Consistency
- The financial leverage ratio remained exceptionally stable throughout the five-year period, fluctuating within a narrow range between 1.30 and 1.32. This stability indicates a disciplined approach to capital management, where the proportion of total assets funded by equity remained virtually unchanged despite the substantial increase in the overall size of the balance sheet.
- Solvency and Risk Profile
- The maintenance of a low financial leverage ratio suggests a conservative solvency profile. By avoiding significant increases in leverage during its growth phase, the company has maintained a strong equity cushion, reducing financial risk and indicating a limited reliance on external debt to finance asset expansion.
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Interest Coverage
Old Dominion Freight Line Inc., interest coverage calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net income | 1,377,159) | 1,034,375) | 672,682) | 615,518) | 605,668) | |
| Add: Income tax expense | 464,190) | 354,048) | 228,682) | 208,431) | 209,845) | |
| Add: Interest expense | 1,563) | 1,727) | 2,782) | 377) | 189) | |
| Earnings before interest and tax (EBIT) | 1,842,912) | 1,390,150) | 904,146) | 824,326) | 815,702) | |
| Solvency Ratio | ||||||
| Interest coverage1 | 1,179.09 | 804.95 | 325.00 | 2,186.54 | 4,315.88 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| FedEx Corp. | 8.11 | 9.42 | — | — | — | |
| Uber Technologies Inc. | -15.49 | -1.20 | — | — | — | |
| Union Pacific Corp. | 8.14 | 8.33 | — | — | — | |
| United Airlines Holdings Inc. | 1.59 | -0.62 | — | — | — | |
| United Parcel Service Inc. | 22.06 | 24.91 | — | — | — | |
| Interest Coverage, Sector | ||||||
| Transportation | 5.17 | 6.98 | — | — | — | |
| Interest Coverage, Industry | ||||||
| Industrials | 4.98 | 5.14 | — | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Interest coverage = EBIT ÷ Interest expense
= 1,842,912 ÷ 1,563 = 1,179.09
2 Click competitor name to see calculations.
Between 2018 and 2022, the company maintained an exceptionally strong solvency position, characterized by substantial operating income and minimal debt servicing costs. The capacity to cover interest obligations remained vastly superior to standard financial benchmarks throughout the period.
- Earnings Before Interest and Tax (EBIT)
- A consistent and significant upward trend is observed in operational profitability. EBIT grew from 815.7 million USD in 2018 to 1.84 billion USD in 2022. The growth trajectory accelerated notably after 2020, with a substantial increase in earnings between 2021 and 2022.
- Interest Expense
- Interest obligations remained remarkably low in absolute terms. After starting at 189 thousand USD in 2018, expenses peaked in 2020 at 2.78 million USD before stabilizing at 1.56 million USD by the end of 2022. Despite the fluctuations, the total interest burden remained negligible relative to the scale of operations.
- Interest Coverage Ratio
- The interest coverage ratio exhibited high volatility but remained at extreme levels, indicating virtually no risk of default. A sharp contraction occurred from 2018 to 2020, where the ratio fell from 4,315.88 to 325.00, primarily driven by the increase in interest expenses. However, a strong recovery followed, with the ratio climbing back to 1,179.09 by 2022, reflecting the rapid expansion of EBIT over the cost of debt.
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Fixed Charge Coverage
Old Dominion Freight Line Inc., fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net income | 1,377,159) | 1,034,375) | 672,682) | 615,518) | 605,668) | |
| Add: Income tax expense | 464,190) | 354,048) | 228,682) | 208,431) | 209,845) | |
| Add: Interest expense | 1,563) | 1,727) | 2,782) | 377) | 189) | |
| Earnings before interest and tax (EBIT) | 1,842,912) | 1,390,150) | 904,146) | 824,326) | 815,702) | |
| Add: Aggregate expense under operating leases | 20,000) | 19,000) | 16,000) | 14,700) | 12,600) | |
| Earnings before fixed charges and tax | 1,862,912) | 1,409,150) | 920,146) | 839,026) | 828,302) | |
| Interest expense | 1,563) | 1,727) | 2,782) | 377) | 189) | |
| Aggregate expense under operating leases | 20,000) | 19,000) | 16,000) | 14,700) | 12,600) | |
| Fixed charges | 21,563) | 20,727) | 18,782) | 15,077) | 12,789) | |
| Solvency Ratio | ||||||
| Fixed charge coverage1 | 86.39 | 67.99 | 48.99 | 55.65 | 64.77 | |
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors2 | ||||||
| FedEx Corp. | 2.29 | 2.83 | — | — | — | |
| Uber Technologies Inc. | -9.72 | -0.36 | — | — | — | |
| Union Pacific Corp. | 6.64 | 6.81 | — | — | — | |
| United Airlines Holdings Inc. | 1.38 | -0.01 | — | — | — | |
| United Parcel Service Inc. | 11.30 | 12.66 | — | — | — | |
| Fixed Charge Coverage, Sector | ||||||
| Transportation | 2.98 | 3.86 | — | — | — | |
| Fixed Charge Coverage, Industry | ||||||
| Industrials | 3.30 | 3.44 | — | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 1,862,912 ÷ 21,563 = 86.39
2 Click competitor name to see calculations.
The analysis of solvency ratios indicates a robust financial position characterized by a substantial capacity to meet fixed obligations. While a period of contraction in coverage efficiency occurred between 2018 and 2020, a subsequent and rapid escalation in earnings has significantly strengthened the solvency profile by the end of the analyzed period.
- Earnings Before Fixed Charges and Tax
- A consistent upward trajectory is observed in earnings, which increased from 828,302 thousand USD in 2018 to 1,862,912 thousand USD in 2022. Growth accelerated sharply after 2020, with a substantial increase in 2021 and 2022, indicating a strong expansion in operating profitability.
- Fixed Charges Trend
- Fixed charges demonstrated a steady increase over the five-year period, rising from 12,789 thousand USD in 2018 to 21,563 thousand USD in 2022. Despite this increase in absolute costs, the growth rate of these charges remained significantly lower than the growth rate of earnings.
- Fixed Charge Coverage Ratio Performance
- The coverage ratio exhibited a U-shaped trend, declining from 64.77 in 2018 to a period low of 48.99 in 2020. This temporary decline suggests that fixed charges grew more rapidly than earnings during those years. However, a strong recovery followed, with the ratio climbing to 67.99 in 2021 and reaching 86.39 in 2022. This peak indicates that the ability to cover fixed obligations is more than twice as strong in 2022 as it was during the 2020 trough.
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