Aramark Holdings (ARMK)

Based on the solvency ratios provided for Aramark Holdings over the past five years, it is evident that the company has consistently maintained a very low level of leverage and debt relative to its assets, capital, and equity. The debt-to-assets ratio, debt-to-capital ratio, and debt-to-equity ratio have all been reported as 0.00 across the five years, indicating that there is no significant debt financing in the company's capital structure during this period.

However, the financial leverage ratio has shown a gradual decline from 5.74 in 2020 to 4.17 in 2024. This decreasing trend suggests that the company has been reducing its reliance on debt to finance its operations and investments. A lower financial leverage ratio indicates a lower level of financial risk and a higher degree of solvency and financial stability.

Overall, based on the solvency ratios provided, Aramark Holdings appears to have a very strong financial position in terms of solvency, with minimal debt obligations in relation to its assets, capital, and equity. This indicates a conservative approach to managing its financial structure and a lower risk of financial distress.

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Coverage ratios

The interest coverage ratio measures a company's ability to meet its interest obligations with its operating income. A higher ratio indicates that the company is more capable of servicing its debt. Aramark Holdings' interest coverage has varied over the past five years:

1. In 2024, the interest coverage ratio was 1.93, showing that the company generated sufficient operating income to cover its interest expenses, albeit with a relatively narrow margin.
2. The ratio improved significantly in 2023 to 2.93, suggesting a stronger ability to meet interest payments.
3. In 2022, the ratio declined to 1.67, indicating a slight decrease in the company's ability to cover interest expenses.
4. The ratio was notably low in 2021 at 0.68, raising concerns about Aramark Holdings' ability to comfortably meet its interest obligations.
5. In 2020, the company had a negative interest coverage ratio of -0.66, indicating that its operating income was insufficient to cover interest expenses, potentially signaling financial distress.

Overall, Aramark Holdings' interest coverage ratios have shown fluctuations in recent years, with some years indicating stronger financial health and others suggesting potential challenges in meeting interest payments. It is important for the company to closely monitor its interest coverage ratio and work towards maintaining a healthy level to ensure financial stability.