Apogee Enterprises Inc (APOG)

Apogee Enterprises Inc's solvency ratios, as reflected in the debt-to-assets, debt-to-capital, debt-to-equity, and financial leverage ratios, have shown fluctuations over the time periods indicated. The debt-to-assets ratio has generally been below 0.3, indicating that only a small portion of the company's assets are financed by debt. However, this ratio has experienced some variability, with a high of 0.29 and a low of 0.01.

The debt-to-capital ratio, which incorporates both debt and equity financing, has similarly fluctuated across the periods but has consistently remained below 0.5. This indicates that Apogee Enterprises relies more on equity financing than debt to fund its operations. The trend shows some increase over time, with the ratio moving from 0.12 to 0.38.

The debt-to-equity ratio has also shown variability, ranging from 0.03 to 0.80. This ratio demonstrates the proportion of the company's financing that is debt-based relative to equity. The trend suggests an overall increase in reliance on debt financing compared to equity financing over the periods analyzed.

Finally, the financial leverage ratio, which measures the company's total assets relative to equity, demonstrates a consistent increasing trend over the periods, with values ranging from 1.88 to 2.77. A higher financial leverage ratio indicates higher financial risk due to increased reliance on debt financing.

Overall, the solvency ratios of Apogee Enterprises Inc suggest a mix of conservative and moderately aggressive financial management strategies, with shifts towards higher debt financing observed over the periods analyzed. Analysts should consider these trends when evaluating the company's ability to meet its financial obligations and manage its long-term financial health.

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Coverage ratios

The interest coverage ratio measures a company's ability to pay its interest expenses on outstanding debt. A higher interest coverage ratio indicates that the company is more capable of meeting its interest obligations. Looking at the historical trend of Apogee Enterprises Inc's interest coverage ratio, we observe fluctuating values over the past few years.

From March 2024 to February 2022, Apogee Enterprises Inc maintained a relatively healthy interest coverage ratio above 10, which suggests that the company had sufficient earnings to cover its interest expenses comfortably. However, there was a notable decrease in interest coverage in May 2022, falling to 7.64, which continued to decline to a lower level of 4.04 in August 2022. This downward trend in interest coverage ratios between May 2022 and August 2022 may raise concerns about the company's ability to service its debt obligations from its operating income.

Moreover, there was a significant negative interest coverage ratio of -5.86 in November 2021, indicating that Apogee Enterprises Inc did not generate enough operating income to cover its interest expenses during that period. This negative interest coverage ratio raises a red flag about the company's financial health and its ability to meet its interest payments.

It is crucial for investors and stakeholders to closely monitor Apogee Enterprises Inc's interest coverage ratio, especially during periods of declining values or negative ratios, as it could signal potential financial distress or difficulty in meeting debt requirements. This analysis highlights the importance of evaluating a company's ability to manage its debt obligations effectively through the lens of the interest coverage ratio.