Astec Industries Inc (ASTE)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.07 | 0.08 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.10 | 0.11 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.11 | 0.12 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 1.62 | 1.62 | 1.39 | 1.32 | 1.33 |
The solvency ratios of Astec Industries Inc. provide insight into the company's ability to meet its long-term financial obligations.
The debt-to-assets ratio has been consistently low over the years, indicating that only a small portion of the company's assets are financed by debt. This suggests a conservative approach to leverage and a lower risk of financial distress.
Similarly, the debt-to-capital and debt-to-equity ratios have remained low as well. These ratios show the proportion of a company's capital structure that is funded by debt, and in the case of Astec Industries, the levels indicate a strong equity position relative to debt.
The financial leverage ratio has also been relatively stable, hovering around 1.6 in recent years. This ratio indicates the extent to which a company's operations are funded by debt, and a ratio of 1.6 suggests that for every dollar of equity, there is $1.60 of debt. This level of leverage is reasonable and does not signal excessive financial risk.
Overall, based on the solvency ratios provided, it can be concluded that Astec Industries Inc. has maintained a prudent and sustainable approach to managing its long-term financial obligations, with a focus on maintaining a healthy balance between debt and equity in its capital structure.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 5.79 | 2.96 | 13.45 | 64.57 | 19.07 |
The interest coverage ratio measures the company's ability to meet its interest payment obligations with its operating income. A higher interest coverage ratio indicates that Astec Industries Inc. is more capable of servicing its debt.
Looking at the data provided for the past five years, it is evident that the interest coverage ratio has been fluctuating. In 2023, the ratio decreased to 8.00 from 11.00 in 2022, indicating a decline in the company's ability to cover interest expenses compared to the previous year.
In 2021, the interest coverage ratio was quite high at 41.00, reflecting a significant improvement in the company's ability to meet its interest obligations. However, the ratio for 2020 is not available, as denoted by "—."
The highest interest coverage ratio in the dataset is seen in 2019 at 161.49, which indicates a very strong ability to cover interest payments with operating income for that year.
Overall, the fluctuation in the interest coverage ratio over the years suggests varying levels of financial health and risk associated with Astec Industries Inc.'s debt obligations. It would be important to further investigate the factors that contributed to these fluctuations to assess the company's debt management and overall financial stability.