Archer-Daniels-Midland Company (ADM)

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	0.15	0.15	0.15	0.13	0.13	0.13	0.13	0.13	0.14	0.15	0.17	0.16	0.16	0.18	0.19	0.18	0.17	0.18	0.18	0.18
Debt-to-capital ratio	0.28	0.25	0.25	0.24	0.26	0.24	0.25	0.27	0.27	0.27	0.28	0.29	0.28	0.29	0.31	0.31	0.36	0.29	0.29	0.29
Debt-to-equity ratio	0.39	0.33	0.33	0.31	0.34	0.32	0.33	0.37	0.36	0.37	0.39	0.40	0.39	0.41	0.45	0.45	0.56	0.40	0.41	0.41
Financial leverage ratio	2.55	2.18	2.23	2.37	2.65	2.43	2.53	2.73	2.53	2.38	2.36	2.47	2.49	2.32	2.30	2.55	3.19	2.22	2.25	2.28

Archer-Daniels-Midland Company's solvency ratios indicate the company's ability to meet its financial obligations over the long term. The debt-to-assets ratio has remained relatively stable around 0.13 to 0.15, indicating that the company relies on debt for about 13% to 15% of its total assets. This ratio suggests a conservative level of debt financing in relation to its asset base.

The debt-to-capital ratio has shown some fluctuations but generally hovers around 0.25 to 0.29. This ratio indicates that debt accounts for approximately 25% to 29% of the company's total capital structure, which includes both debt and equity. The variations in this ratio may reflect changes in the company's capital structure over time.

The debt-to-equity ratio has also fluctuated, ranging from 0.31 to 0.56. This ratio shows the proportion of debt relative to shareholders' equity, with higher ratios indicating higher financial leverage and greater reliance on debt financing. The company's debt-to-equity ratio has shown some volatility, suggesting varying levels of risk in the company's financial structure.

The financial leverage ratio, which measures the proportion of assets financed by debt, has varied significantly, ranging from 2.18 to 3.19. A higher financial leverage ratio indicates higher financial risk due to increased reliance on debt financing. The fluctuations in this ratio may signal changes in the company's debt levels and overall leverage.

Overall, Archer-Daniels-Midland Company's solvency ratios indicate a mix of debt and equity financing in its capital structure, with varying levels of leverage over time. Monitoring these ratios can provide insights into the company's long-term financial stability and risk management.

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	7.66	8.73	9.89	12.84	14.15	15.74	15.58	14.81	13.40	12.83	9.76	7.76	6.53	5.45	6.32	5.29	4.95	4.46	4.88	6.10

Archer-Daniels-Midland Company has shown a generally improving trend in its interest coverage ratio over the past five years. The interest coverage ratio measures the company's ability to meet its interest obligations from its operating income. A higher ratio indicates a stronger ability to cover interest expenses.

In the most recent period, the interest coverage ratio was 7.66, signifying that the company generated operating income 7.66 times greater than its interest expenses. This indicates a reasonable ability to cover interest costs. Furthermore, the trend over the past five quarters has generally been positive, with the ratio steadily increasing from 4.95 in March 2020 to 7.66 in December 2023.

The interest coverage ratios above 1 indicate that the company is able to cover its interest payments from its operating income. Therefore, Archer-Daniels-Midland Company appears to have a healthy level of interest coverage, indicating financial stability and a lower risk of default on its debt obligations. Investors and creditors generally consider a higher interest coverage ratio to be favorable as it signifies a lower risk of financial distress.