Ashland Global Holdings Inc (ASH)
Solvency ratios
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.22 | 0.20 | 0.24 | 0.23 | 0.21 |
| Debt-to-capital ratio | 0.30 | 0.28 | 0.37 | 0.34 | 0.30 |
| Debt-to-equity ratio | 0.42 | 0.39 | 0.58 | 0.52 | 0.42 |
| Financial leverage ratio | 1.92 | 1.93 | 2.40 | 2.27 | 2.03 |
The solvency ratios of Ashland Inc for the years 2019 to 2023 portray its ability to meet its long-term financial obligations. The debt-to-assets ratio has shown a fluctuating trend, with a notable decrease from 0.30 in 2021 to 0.22 in 2023, indicating a higher proportion of assets financed by equity. This suggests an improved ability to cover debts with assets. Similarly, the debt-to-capital and debt-to-equity ratios depict a decreasing trend, signifying a reduced reliance on debt for capital structure.
Furthermore, the financial leverage ratio shows a variance over the years, indicating the company's ability to generate earnings to cover fixed financing costs. The decrease in this ratio from 2.40 in 2021 to 1.92 in 2023 reflects a favorable shift towards lower financial risk.
In conclusion, the solvency ratios of Ashland Inc demonstrate a positive trend, showcasing an enhanced capacity to cover debt obligations with assets and a decreased dependence on debt for overall capital structure, thereby improving the company's long-term financial stability.
Coverage ratios
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 2.97 | 5.29 | 2.70 | -5.12 | 0.75 |
The interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt. A higher ratio indicates a greater ability to cover interest expenses from operating income.
Ashland Inc's interest coverage ratio has shown positive trends over the years, indicative of improved financial health. In 2023, the interest coverage ratio was 3.95, a slight decrease from the previous year's 5.02. The decrease may be a cause for monitoring, as it suggests a slightly reduced ability to cover interest payments from operating income.
However, when compared to 2021 and previous years, the interest coverage ratio has significantly improved, indicating a stronger ability to meet interest obligations. In 2021, the ratio stood at 2.66, showing a notable increase from 2019 and 2020. This suggests that the company's ability to cover interest payments has strengthened over time.
Although the recent decrease in the interest coverage ratio may warrant attention, the overall trend reflects an improvement in Ashland Inc's ability to handle its interest expenses, potentially indicating better financial stability.