Smith AO Corporation (AOS)

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 0.04 0.04 0.06 0.10 0.10 0.09 0.09 0.08 0.05 0.03 0.03 0.03 0.03 0.04 0.09 0.11 0.09 0.10 0.11 0.09
Debt-to-capital ratio 0.06 0.06 0.09 0.16 0.16 0.14 0.14 0.14 0.09 0.05 0.05 0.05 0.05 0.06 0.14 0.17 0.14 0.16 0.17 0.14
Debt-to-equity ratio 0.06 0.06 0.10 0.18 0.19 0.16 0.16 0.16 0.10 0.05 0.05 0.05 0.06 0.06 0.17 0.21 0.17 0.19 0.20 0.16
Financial leverage ratio 1.74 1.70 1.72 1.86 1.91 1.85 1.85 1.90 1.90 1.74 1.73 1.68 1.71 1.70 1.80 1.85 1.83 1.85 1.84 1.80

The solvency ratios of A.O. Smith Corp. indicate the company's ability to meet its long-term financial obligations.

The debt-to-assets ratio has remained relatively stable over the quarters, ranging from 0.04 to 0.10. This suggests that the company finances a small portion of its assets with debt, which could be considered a positive sign of financial stability.

Similarly, the debt-to-capital ratio has also shown stability, staying in a narrow range between 0.06 and 0.16. This ratio indicates the proportion of the company's capital that is financed by debt, and the consistent levels suggest a balanced capital structure.

The debt-to-equity ratio has fluctuated more, from 0.07 to 0.20, with higher ratios indicating a higher level of financial risk as more of the company's operations are funded by debt rather than equity.

The financial leverage ratio has displayed a slight downward trend over the quarters, indicating a decreasing reliance on debt to finance the company's operations. However, it is important to note that the ratio remains above 1, indicating that the company has more debt than equity in its capital structure.

Overall, A.O. Smith Corp. appears to maintain a conservative approach to debt financing, with a focus on a balanced capital structure and sustainable solvency levels. It is essential for investors to monitor these solvency ratios to assess the company's long-term financial health and risk profile.

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 62.12 22.94 20.72 21.03 24.80 88.62 112.68 137.69 146.49 153.74 126.91 83.34 61.81 47.31 38.18 39.23 43.92 50.65 58.62 68.16

The interest coverage ratio for A.O. Smith Corp. has shown a declining trend over the past four quarters, starting at 70.07 in Q4 2022 and decreasing to 57.46 in Q1 2023. The ratio indicates the company's ability to meet its interest obligations from its operating income. Despite the recent decline, the interest coverage ratio remains relatively high, implying that A.O. Smith Corp. continues to have strong earnings relative to its interest expenses. However, the decreasing trend suggests that the company may need to closely monitor its interest obligations to ensure continued financial stability.