AGCO Corporation (AGCO)

AGCO Corporation's solvency ratios indicate its ability to meet its long-term financial obligations. The debt-to-assets ratio has been relatively stable over the years, decreasing from 0.15 in 2020 to 0.12 in 2023, before increasing to 0.20 in 2024. This suggests that AGCO Corporation has maintained a conservative level of debt in relation to its assets.

Similarly, the debt-to-capital ratio and debt-to-equity ratio have shown a decreasing trend over the years, indicating a decreasing reliance on debt to fund its operations. The debt-to-capital ratio decreased from 0.30 in 2020 to 0.23 in 2023 before increasing to 0.37 in 2024. The debt-to-equity ratio decreased from 0.42 in 2020 to 0.30 in 2023 before increasing to 0.60 in 2024.

The financial leverage ratio, which measures the company's total debt to equity, has also shown a decreasing trend from 2.85 in 2020 to 2.45 in 2023, before increasing to 2.99 in 2024. This indicates AGCO Corporation's decreasing reliance on debt financing compared to its equity.

Overall, AGCO Corporation's solvency ratios show a mixed trend, with some ratios improving while others worsening. It is essential for investors and stakeholders to monitor these ratios closely to assess the company's financial health and risk levels.

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Coverage ratios

Interest coverage ratio is used to assess a company's ability to meet its interest obligations on outstanding debt. A higher interest coverage ratio indicates a stronger ability to cover interest expenses.

Looking at AGCO Corporation's interest coverage ratio over the past five years, we see positive trends. The ratio was 25.69 in 2020, demonstrating the company's ability to cover its interest payments 25.69 times over. In 2021, the ratio improved to 40.58, reflecting an even stronger ability to cover interest expenses.

In 2022, the interest coverage ratio remained robust at 26.79, indicating continued strong performance. However, in 2023, there was a slight decline to 21.38, which may warrant further investigation to understand the reason behind the decrease.

Furthermore, in 2024, the interest coverage ratio turned negative at -1.31, suggesting that the company's operating income may not be sufficient to cover its interest expenses. This significant decline raises concerns about the company's financial health and ability to service its debt obligations.

Overall, while AGCO Corporation demonstrated good interest coverage ratios in the past, the negative ratio in 2024 highlights the importance of closely monitoring financial performance and implementing strategies to improve debt servicing capabilities.