Alamo Group Inc (ALG)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| 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 | 1.51 | 1.67 | 1.71 | 1.77 | 2.10 |
The solvency ratios of Alamo Group Inc. provide insights into the company's ability to meet its debt obligations and the level of financial risk it carries.
The trends seen in the data indicate an improving solvency position over the years. The debt-to-assets ratio has decreased steadily from 0.37 in 2019 to 0.17 in 2023, indicating a lower reliance on debt to finance assets. This suggests a healthier balance sheet structure with a lower proportion of assets financed by debt.
Similarly, the debt-to-capital and debt-to-equity ratios have shown a decreasing trend, highlighting a reduction in the proportion of debt in the company's capital structure. The decrease in these ratios indicates that Alamo Group Inc. has been gradually reducing its reliance on debt financing, which is generally a positive sign for long-term solvency.
Furthermore, the financial leverage ratio has also declined over the years, indicating a decreasing level of financial risk associated with the company's capital structure. This shows an improved ability to cover interest expenses and potential debt repayments, contributing to a more stable financial position.
Overall, the data suggests that Alamo Group Inc. has successfully improved its solvency position by reducing its reliance on debt and strengthening its financial structure over the years. This trend is generally favorable for the company's long-term financial health and ability to weather economic uncertainties.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 7.71 | 10.35 | 11.40 | 6.04 | 8.87 |
The interest coverage ratio for Alamo Group Inc. has exhibited fluctuations over the past five years.
In 2023, the interest coverage ratio was 8.04, a decrease from the previous year's ratio of 10.92 in 2022. Despite the decline, the company's ability to cover its interest expenses still indicates a reasonably healthy position.
Looking further back, there was a significant increase in interest coverage from 2019 when the ratio was 9.94 to 2021 when it reached 12.46, showcasing improved ability to cover interest expenses during these years.
In contrast, there was a dip in the interest coverage ratio in 2020 to 6.44, which could indicate a period of tighter financial position or higher interest expenses relative to operating income.
Overall, the trend in interest coverage suggests some variability in Alamo Group Inc.'s ability to cover its interest payments, but the company has generally maintained a solid position over the years. Further analysis of the underlying factors influencing these fluctuations would provide more insights into the company's financial health.