Albemarle Corp (ALB)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.19 | 0.21 | 0.18 | 0.26 | 0.29 |
| Debt-to-capital ratio | 0.27 | 0.29 | 0.26 | 0.39 | 0.42 |
| Debt-to-equity ratio | 0.38 | 0.40 | 0.36 | 0.65 | 0.73 |
| Financial leverage ratio | 1.94 | 1.94 | 1.95 | 2.45 | 2.51 |
Albemarle Corp.'s solvency ratios indicate its ability to meet its long-term financial obligations and the proportion of debt in its capital structure.
The debt-to-assets ratio has ranged between 0.21 to 0.34 over the past five years, with a decreasing trend in recent years. This suggests that Albemarle Corp. has been effectively managing its debt levels relative to its total assets.
The debt-to-capital ratio has followed a similar trend, declining from 0.46 in 2020 to 0.31 in 2023. This indicates that the company's reliance on debt to finance its operations has decreased, which may reduce financial risk.
The debt-to-equity ratio reflects the proportion of debt relative to equity in the company's capital structure. Albemarle Corp.'s ratio has shown a decreasing trend from 0.84 in 2020 to 0.44 in 2023. This implies that the company has been gradually reducing its debt levels in relation to equity, which could signal improved financial stability.
The financial leverage ratio measures the extent to which a company relies on debt to finance its operations. Albemarle Corp.'s ratio has decreased from 2.51 in 2019 to 1.94 in recent years. This shows that the company has been reducing its reliance on debt for funding its operations, potentially enhancing its financial flexibility and ability to weather economic uncertainties.
Overall, the solvency ratios of Albemarle Corp. suggest a positive trend towards lower debt levels relative to assets, capital, equity, and overall financial leverage, indicating improved financial health and stability.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 3.24 | 71.38 | 15.06 | 15.29 | 21.97 |
Albemarle Corp.'s interest coverage ratio has exhibited some fluctuations over the past five years. The interest coverage ratio compares the company's earnings before interest and taxes (EBIT) to its interest expenses, thus indicating its ability to meet interest payments.
In 2023, Albemarle Corp.'s interest coverage ratio was 17.53, reflecting a decrease from the previous year but remained at a relatively high level. This indicates that the company generated earnings that were approximately 17.53 times greater than its interest expenses for the year.
In 2022, the interest coverage ratio was notably higher at 26.43, indicating a strong ability to cover interest payments with a higher level of earnings. This could suggest sound financial health and a lower risk of default on debt obligations.
A slight decline was observed in 2021, with the interest coverage ratio falling to 9.73. While still reflecting that the company's earnings are sufficient to cover interest expenses, the decrease may raise some concerns about the company's ability to service its debt effectively.
Similarly, in 2020, the interest coverage ratio was 8.66, indicating a further decline in the ability to cover interest obligations compared to the previous year. This may signal a decreased financial resilience or potential strain on the company's ability to meet interest payments.
Finally, in 2019, Albemarle Corp.'s interest coverage ratio was 13.79, showing a rebound from the previous year but still lower than the ratio observed in 2022. This suggests an improvement in the company's ability to cover interest expenses compared to 2020 and 2021.
Overall, while the interest coverage ratio has fluctuated over the five-year period, the company generally exhibited a healthy ability to meet its interest obligations, with the ratios well above 1 in each year. However, the fluctuations indicate some variability in the company's financial performance and warrant monitoring to ensure sustainable debt management strategies.