Albemarle Corp (ALB)
Solvency ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.19 | 0.20 | 0.19 | 0.18 | 0.19 | 0.19 | 0.18 | 0.18 | 0.21 | 0.23 | 0.26 | 0.17 | 0.18 | 0.19 | 0.19 | 0.20 | 0.26 | 0.29 | 0.31 | 0.32 |
| Debt-to-capital ratio | 0.24 | 0.26 | 0.24 | 0.23 | 0.27 | 0.26 | 0.26 | 0.26 | 0.29 | 0.32 | 0.35 | 0.25 | 0.26 | 0.26 | 0.25 | 0.26 | 0.39 | 0.42 | 0.44 | 0.44 |
| Debt-to-equity ratio | 0.31 | 0.35 | 0.31 | 0.31 | 0.38 | 0.35 | 0.36 | 0.35 | 0.40 | 0.46 | 0.53 | 0.34 | 0.36 | 0.36 | 0.33 | 0.35 | 0.65 | 0.71 | 0.78 | 0.80 |
| Financial leverage ratio | 1.67 | 1.70 | 1.64 | 1.65 | 1.94 | 1.91 | 1.95 | 1.91 | 1.94 | 2.05 | 2.06 | 1.96 | 1.95 | 1.90 | 1.75 | 1.79 | 2.45 | 2.48 | 2.53 | 2.54 |
Albemarle Corp's solvency ratios reflect the company's ability to meet its long-term financial obligations. The Debt-to-assets ratio has shown a decreasing trend from 0.32 in March 2020 to 0.19 in June 2023 before slightly increasing to 0.20 in March 2024. This indicates that the company's total debt as a proportion of its total assets has been decreasing over the years, which is a positive sign for creditors and investors.
The Debt-to-capital ratio has also been decreasing steadily from 0.44 in March 2020 to 0.24 in December 2024. This suggests that Albemarle Corp has been relying less on debt to finance its capital structure over the years, resulting in a lower proportion of debt relative to its total capital.
Furthermore, the Debt-to-equity ratio has followed a similar declining trend, decreasing from 0.80 in March 2020 to 0.31 in December 2024. This indicates that the company has been using less equity financing compared to debt financing, resulting in a stronger financial position in terms of its leverage.
Lastly, the Financial leverage ratio has also decreased consistently over the period, reflecting a reduction in the company's financial risk. The ratio declined from 2.54 in March 2020 to 1.67 in December 2024, indicating that Albemarle Corp has been effectively managing its leverage and reducing its reliance on debt to finance its operations.
Overall, Albemarle Corp's solvency ratios demonstrate a positive solvency position, characterized by decreasing debt levels relative to assets, capital, and equity, as well as a declining financial leverage ratio. These trends indicate improved financial stability and risk management within the company.
Coverage ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | -13.76 | -16.66 | -14.88 | -13.17 | 3.24 | 53.16 | 83.30 | 93.65 | 71.38 | 30.13 | 15.91 | 17.97 | 15.06 | 28.65 | 29.06 | 16.20 | 15.29 | 16.14 | 17.81 | 20.53 |
Albemarle Corp's interest coverage ratio, which indicates the company's ability to pay its interest expenses with its operating income, has shown fluctuations over the reported periods.
The interest coverage ratio was relatively strong, starting at 20.53 in March 2020, indicating that the company earned 20.53 times the amount needed to cover its interest expenses. However, this ratio gradually declined over the following quarters, reaching a low of 3.24 in December 2023. A ratio below 1 implies that the company's operating income was not sufficient to cover its interest expenses.
From March 2024 onwards, the interest coverage ratio turned negative, implying that Albemarle Corp may have been facing challenges in meeting its interest obligations with its operating income. The negative trend continued in subsequent quarters, depicting a worsening financial position in terms of interest coverage.
The significant decline in the interest coverage ratio in the last few quarters is a red flag for investors and analysts, indicating potential financial distress and heightened risk for the company in terms of debt repayment. It suggests that Albemarle Corp might be struggling to generate enough income to cover its interest payments, potentially leading to liquidity issues and increased financial leverage.