Allegion PLC (ALLE)

Solvency ratios

	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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Debt-to-assets ratio	0.37	0.48	0.49	0.51	0.52	0.56	0.55	0.47	0.47	0.38	0.47	0.49	0.47	0.47	0.50	0.52	0.48	0.50	0.49	0.50
Debt-to-capital ratio	0.55	0.62	0.64	0.67	0.69	0.74	0.72	0.66	0.65	0.58	0.65	0.66	0.63	0.63	0.68	0.70	0.65	0.68	0.68	0.69
Debt-to-equity ratio	1.22	1.63	1.80	2.02	2.21	2.80	2.60	1.92	1.88	1.38	1.82	1.96	1.72	1.73	2.11	2.34	1.88	2.08	2.11	2.21
Financial leverage ratio	3.27	3.40	3.66	3.96	4.24	4.98	4.70	4.06	4.02	3.61	3.90	4.05	3.70	3.67	4.18	4.51	3.92	4.18	4.31	4.42

The solvency ratios of Allegion plc indicate the company's ability to meet its financial obligations and manage its debt levels effectively.

The Debt-to-assets ratio has been decreasing over the past eight quarters, from 0.52 in Q4 2022 to 0.47 in Q4 2023. This suggests that Allegion plc has been reducing its reliance on debt to finance its assets, which is generally a positive indicator of financial health.

The Debt-to-capital ratio has also shown a decreasing trend, from 0.69 in Q4 2022 to 0.60 in Q4 2023. This indicates that the company has been using more of its own capital rather than debt to fund its operations, which may lower financial risk.

On the other hand, the Debt-to-equity ratio has been increasing steadily over the same period, from 2.22 in Q4 2022 to 1.53 in Q4 2023. This signifies that the company is employing more debt relative to equity in its capital structure, which could increase financial risk and leverage.

The Financial leverage ratio has also been decreasing over the quarters, from 4.24 in Q4 2022 to 3.27 in Q4 2023. This suggests that the company has been reducing its reliance on debt to fund its operations, which may lead to lower financial risk and greater stability.

In summary, Allegion plc has been improving its solvency position by reducing its debt-to-assets and debt-to-capital ratios, which indicates a more conservative approach to financing. However, the increasing debt-to-equity ratio raises concerns about the company's level of leverage. The decreasing financial leverage ratio reflects a positive trend towards lower reliance on debt. Investors and stakeholders should monitor these solvency ratios to assess Allegion's ability to manage its debt and meet financial obligations effectively.

Coverage ratios

	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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Interest coverage	7.63	7.60	7.21	7.33	7.77	8.63	10.26	11.21	11.43	11.24	11.50	10.42	8.15	7.86	7.35	8.09	9.48	9.94	9.83	9.83

Allegion plc's interest coverage ratio has been relatively stable over the past eight quarters, ranging from 7.45 to 10.61. The interest coverage ratio measures the company's ability to cover its interest expenses with its operating income. A higher ratio indicates a stronger ability to meet interest obligations.

During the most recent quarter (Q4 2023), Allegion plc's interest coverage ratio was 8.30, showing that the company generated operating income 8.30 times greater than its interest expenses. This suggests that Allegion plc has a healthy financial position and is comfortably covering its interest payments.

Looking at the trend over the past two years, there has been a slight decline in the interest coverage ratio from Q1 2022 to Q4 2023, which may warrant further monitoring. While the ratios are still robust, management should continue to monitor the trend and ensure the company maintains a comfortable cushion to meet its interest obligations.