United Rentals Inc. (NYSE:URI)

Debt to Equity

There is a clear downward trend in the debt to equity ratio from 3.45 in 2018 to 1.61 in 2022, indicating a substantial reduction in leverage relative to shareholder equity over the period.

Debt to Equity (Including Operating Lease Liability)

This ratio follows a similar decreasing pattern, starting at 3.45 in 2018 and declining to 1.73 by 2022. Although slightly higher than the traditional debt to equity ratio, it also reflects a consistent reduction in financial leverage when operating lease liabilities are considered.

Debt to Capital

The debt to capital ratio also shows a downward trend from 0.78 in 2018 to 0.62 in 2022. This trend suggests an improvement in the capital structure, with less reliance on debt financing over time.

Debt to Capital (Including Operating Lease Liability)

This metric remains slightly higher than the conventional debt to capital ratio but decreases from 0.78 in 2018 to 0.63 in 2022, indicating a improving debt position even when factoring in operating lease liabilities.

Debt to Assets

A steady reduction is evident in the debt to assets ratio, from 0.65 in 2018 to 0.47 in 2022, signaling that the company has been lowering its leverage relative to its total asset base.

Debt to Assets (Including Operating Lease Liability)

This ratio decreases from 0.65 to 0.51 over the period, parallel to the traditional debt to assets ratio but remains higher due to the inclusion of operating lease liabilities.

Financial Leverage

Financial leverage shows a decline from 5.33 in 2018 to 3.42 in 2022, reflecting the lower proportion of total assets financed by equity. This decrease indicates a more conservative financial structure.

Interest Coverage

Interest coverage ratio shows an initial decline from 4.07 in 2018 to 2.7 in 2020, followed by a strong recovery to 7.3 in 2022. This suggests that the company faced some challenges in covering interest expenses early in the period but has since greatly improved its ability to service interest obligations.

Fixed Charge Coverage

Fixed charge coverage decreases from 3.24 in 2018 to 2.1 in 2020, mirroring the trend in interest coverage but recovers to 3.98 by 2022. This pattern indicates temporary pressure on covering fixed charges that has eased significantly more recently.

Total Debt

The total debt demonstrated a declining trend from 2018 to 2020, decreasing from $11,747 million to $9,682 million. However, it stabilized slightly in 2021 at $9,685 million before increasing again in 2022 to $11,370 million, approaching the levels seen in 2018.

Stockholders’ Equity

Stockholders' equity consistently increased across the five-year period. Starting at $3,403 million in 2018, it grew steadily each year, reaching $7,062 million by the end of 2022. This reflects a strengthening in the company's net asset base.

Debt to Equity Ratio

The debt to equity ratio showed a clear downward trajectory, dropping from 3.45 in 2018 to 1.61 in 2022. This trend indicates an improvement in financial leverage, with the company relying less on debt relative to its equity. Notably, the most significant reductions occurred between 2018 and 2021, with stabilization observed between 2021 and 2022.

The financial data reveals several important trends regarding the company's debt levels, equity, and leverage ratios over the five-year period from 2018 to 2022.

Total debt (including operating lease liability)

The total debt shows an initial increase from 11,747 million US dollars in 2018 to 12,139 million in 2019, followed by a notable decrease to 10,409 million in 2020. From 2020 onward, the debt remained relatively stable in 2021 at 10,508 million but experienced an increase again in 2022 to 12,223 million. This indicates some variability in the company's borrowing, with a dip during the mid-period and a resurgence to around prior peak levels by the end of 2022.

Stockholders’ equity

There is a consistent and significant growth in stockholders’ equity over the analyzed years. It increased each year from 3,403 million in 2018 to 7,062 million by 2022. This growth suggests a steady accumulation of net assets and potentially retained earnings, reflecting a strengthening equity base.

Debt to equity ratio (including operating lease liability)

The leverage ratio has exhibited a pronounced downward trend. Starting at a high of 3.45 in 2018, the ratio declined steadily to 1.73 by 2022. This reduction indicates that the company’s equity has grown at a faster pace than its debt, resulting in lower financial leverage and potentially reduced financial risk. The relative stability in total debt combined with rising equity is the key driver of this improving leverage metric.

Overall, the data suggests the company has improved its financial structure by building equity more rapidly than debt, thereby lowering its dependence on external financing. Although total debt dipped mid-period, it returned to previous levels, but the enhanced equity base has ensured that leverage continued to decline.

Total Debt

The total debt exhibited a decreasing trend from 2018 to 2020, declining from $11,747 million in 2018 to $9,682 million in 2020. This reduction was followed by stabilization in 2021 at $9,685 million and subsequently an increase to $11,370 million in 2022, approaching the 2018 level.

Total Capital

Total capital showed fluctuations within the period but an overall upward movement. It decreased marginally from $15,150 million in 2018 to $14,227 million in 2020. Thereafter, it increased significantly, reaching $15,676 million in 2021 and further rising to $18,432 million in 2022, suggesting an expansion in the company’s capital base.

Debt to Capital Ratio

The debt to capital ratio displayed a clear declining trend from 2018 through 2021. It dropped from a high ratio of 0.78 in 2018 to 0.62 by 2021, indicating a reduction in leverage. This ratio remained unchanged in 2022 at 0.62 despite the rise in total debt, due to the corresponding increase in total capital. This suggests an improvement in the company’s capital structure and a relative reduction in financial risk over the period.

Total debt (including operating lease liability)

The total debt exhibits a fluctuating trend over the analyzed periods. Starting at $11,747 million at the end of 2018, it increased slightly to $12,139 million in 2019. Subsequently, there was a notable decline to $10,409 million in 2020, followed by a modest increase to $10,508 million in 2021. The total debt rose again more substantially in 2022 to $12,223 million, slightly surpassing the 2019 level.

Total capital (including operating lease liability)

The total capital consistently increased throughout the periods reported. Beginning at $15,150 million at the end of 2018, it grew to $15,969 million in 2019 before a minor decrease to $14,954 million in 2020. Thereafter, a steady upward trend was observed, reaching $16,499 million in 2021 and culminating at $19,285 million in 2022. This suggests ongoing capital expansion over the five-year span with a slight dip in 2020.

Debt to capital ratio (including operating lease liability)

The debt to capital ratio shows a clear and consistent downward trend from 2018 through 2022. The ratio decreased from 0.78 in 2018 to 0.76 in 2019, followed by a more marked decline to 0.70 in 2020. The ratio further decreased to 0.64 in 2021 and finally reached 0.63 in 2022. This declining ratio indicates a gradual reduction in leverage relative to total capital, suggesting a strengthening capital structure or a cautious approach to debt financing.

The financial data reveals several notable trends in the company’s leverage and asset management over the five-year period from 2018 to 2022.

Total Debt

The total debt showed a decline from 11,747 million USD in 2018 to 9,682 million USD in 2020, followed by a slight stabilization around 9,685 million USD in 2021. However, in 2022, there was a marked increase to 11,370 million USD, nearing the initial 2018 level. This suggests a period of debt reduction initially, then an increase in the most recent year.

Total Assets

Total assets exhibited an overall upward trajectory, rising from 18,133 million USD in 2018 to 24,183 million USD in 2022. There was a slight dip between 2019 and 2020 but the subsequent years demonstrated significant growth, particularly in 2021 and 2022. This indicates that the company has been expanding its asset base steadily over the period.

Debt to Assets Ratio

The leverage ratio, measured as debt to assets, shows a consistent decline from 0.65 in 2018 down to 0.47 in 2022. This decline occurred despite the increase in absolute debt in 2022, reflecting that asset growth outpaced the growth in debt. The decreasing ratio implies an improvement in the company’s capital structure and lower relative debt burden over time.

In summary, the company has effectively increased its asset base while reducing relative leverage, enhancing financial flexibility. The recent uptick in total debt should be monitored, but the substantial asset growth has maintained a favorable debt-to-asset ratio.

Total debt (including operating lease liability)

The total debt demonstrates a fluctuating but overall increasing pattern across the analyzed periods. Starting at $11,747 million in 2018, it rose slightly to $12,139 million in 2019, then declined to $10,409 million in 2020, followed by a marginal increase to $10,508 million in 2021. In 2022, there was a notable rise to $12,223 million, reaching its highest level within the timeframe.

Total assets

Total assets show a general upward trend over the five-year span. After an initial increase from $18,133 million in 2018 to $18,970 million in 2019, assets slightly decreased to $17,868 million in 2020. Subsequently, assets grew significantly to $20,292 million in 2021 and continued their strong growth, attaining $24,183 million by 2022. The increase in assets in the last two years is particularly pronounced.

Debt to assets ratio (including operating lease liability)

This ratio steadily decreased throughout the period, moving from 0.65 in 2018 down to 0.51 in 2022. The decline indicates a gradual reduction in leverage relative to the company's asset base. The most significant drop occurred between 2019 and 2021, where the ratio decreased from 0.64 to 0.52, reflecting either effective debt management or asset growth exceeding the increase in debt. In 2022, the ratio decreased slightly despite the rise in total debt, due to the larger proportional growth in total assets.

Total Assets

Total assets demonstrated an overall upward trend over the period from 2018 to 2022. Starting at 18,133 million US dollars in 2018, total assets slightly increased to 18,970 million in 2019, then showed a minor decline to 17,868 million in 2020. Subsequently, there was a notable rise to 20,292 million in 2021, followed by a substantial increase to 24,183 million in 2022. This indicates a general expansion in asset base, particularly marked in the last two years.

Stockholders’ Equity

Stockholders’ equity showed consistent growth throughout the analyzed period. Beginning at 3,403 million US dollars in 2018, it increased steadily each year to reach 7,062 million by the end of 2022. The growth was especially significant after 2020, with equity increasing by more than 1,400 million between 2020 and 2021, and by over 1,000 million from 2021 to 2022. This pattern reflects a strengthening equity position.

Financial Leverage

Financial leverage ratio exhibited a consistent decreasing trend from 2018 through 2021, falling from 5.33 in 2018 to 3.39 in 2021. This decrease suggests a reduction in reliance on debt relative to equity, implying improved financial stability or a more conservative capital structure. In 2022, however, the ratio slightly increased to 3.42, indicating a minor uptick in leverage but still maintaining a substantially lower level than in earlier years.

The analysis of the financial data over the five-year period reveals distinct trends in earnings, interest expenses, and the company's ability to cover interest costs.

Earnings before Interest and Tax (EBIT)

EBIT experienced an overall upward trajectory, beginning at $1,957 million in 2018 and rising to $3,247 million by the end of 2022. Although there was a decline in 2020, dropping to $1,808 million—likely influenced by external economic conditions—it rebounded strongly in the subsequent years, peaking in 2022. This suggests a recovery and expansion phase after the dip, reflecting improved operational performance or market conditions.

Interest Expense, Net

Net interest expense showed some variability but within a narrower range compared to EBIT. Starting at $481 million in 2018, interest expense increased through 2020, reaching $669 million, then declined significantly to $424 million in 2021 before a slight rise to $445 million in 2022. This pattern may indicate refinancing activities, changes in debt levels, or fluctuations in interest rates over the period.

Interest Coverage Ratio

The interest coverage ratio, which measures the company’s ability to meet interest payments from EBIT, declined from 4.07 in 2018 to a low of 2.7 in 2020, corresponding with the drop in EBIT and the peak in interest expense. However, it improved markedly afterwards, reaching 7.3 in 2022. This improvement signals strengthened earnings relative to interest obligations and an enhanced capacity to cover interest expenses, suggesting a stronger financial position and reduced risk related to debt servicing.

Overall, the data indicates that after a challenging period in 2020 characterized by reduced EBIT and increased interest expenses, the company showed considerable recovery and financial strengthening. The increase in EBIT coupled with a decline in interest expenses in the following years contributed to a significant improvement in the interest coverage ratio, highlighting better operational efficiency and financial health.

The financial data indicates fluctuating trends in earnings before fixed charges and tax, fixed charges, and fixed charge coverage ratio over the five-year period ending December 31, 2022.

Earnings before fixed charges and tax

This metric shows an overall upward trend despite some variability. Starting at 2,136 million USD in 2018, it increased to 2,532 million USD in 2019, then declined to 2,174 million USD in 2020. Subsequently, it rose to 2,702 million USD in 2021 and experienced a significant jump to 3,741 million USD by the end of 2022, indicating improved operational profitability or recovery post-2020.

Fixed charges

Fixed charges have grown markedly from 660 million USD in 2018 to over 1,000 million USD in 2019 and 2020 (1,018 million USD and 1,035 million USD respectively). These charges then decreased to 856 million USD in 2021 before rising slightly again to 939 million USD in 2022. This pattern suggests fluctuating financing or lease obligations that may reflect refinancing activities or changes in capital structure.

Fixed charge coverage ratio

The coverage ratio, which measures the ability to cover fixed charges with earnings, declined from 3.24 in 2018 to 2.49 in 2019 and further to 2.1 in 2020, signaling increased burden or reduced earnings adequacy during this period. However, there was a recovery starting in 2021, with the ratio improving to 3.16 and increasing further to 3.98 by 2022, indicating enhanced capacity to meet fixed financial obligations relative to earnings.

In summary, earnings experienced a setback in 2020 but recovered strongly by 2022. Fixed charges showed variability but generally remained elevated compared to 2018. The fixed charge coverage ratio mirrors these movements, declining during periods of earnings softness and improving notably by 2022, pointing toward strengthened financial resilience and improved ability to cover fixed obligations with operating earnings over the course of the period.