Alamo Group Inc (ALG)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 1.42 | 1.51 | 1.67 | 1.71 | 1.77 |
Based on the provided data, Alamo Group Inc has consistently maintained a strong solvency position over the years as evidenced by its low debt-to-assets, debt-to-capital, and debt-to-equity ratios, all of which are reported as 0.00 for the years from 2020 to 2024. This indicates that the company's total debt levels are very low in comparison to its total assets, capital, and equity, reflecting a low level of financial risk.
Additionally, the financial leverage ratio has decreased steadily from 1.77 in 2020 to 1.42 in 2024. A decreasing financial leverage ratio suggests that the company is relying less on debt to finance its operations and growth, which can be interpreted as a positive sign of improving financial stability and lower risk of default.
Overall, these solvency ratios depict Alamo Group Inc as a financially stable company with a conservative capital structure and an effective management of debt levels, enhancing its ability to weather economic downturns and pursue growth opportunities.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 8.28 | 7.71 | 10.35 | 11.10 | 6.29 |
Based on the data provided, Alamo Group Inc's interest coverage has shown a positive trend over the years from 2020 to 2024. The interest coverage ratio indicates the company's ability to meet its interest obligations with its operating income.
In 2020, Alamo Group Inc had an interest coverage ratio of 6.29, suggesting that the company's operating income could cover its interest expenses approximately 6 times. This ratio improved significantly to 11.10 in 2021, indicating a stronger ability to meet interest payments.
The trend continued to be positive in 2022 and 2023, with interest coverage ratios of 10.35 and 7.71, respectively. Although the ratio dipped in 2023, it remained at a level that indicates the company's ability to comfortably cover its interest costs.
By the end of 2024, the interest coverage ratio increased to 8.28, showing that Alamo Group Inc continued to manage its interest obligations effectively.
Overall, the increasing trend in the interest coverage ratio reflects the company's improving financial health and ability to generate sufficient operating income to service its interest payments. This trend signifies a positive sign for creditors and investors as it indicates a reduced risk of default on interest payments.