Avery Dennison Corp (AVY)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 3.62 | 3.86 | 3.91 | 4.14 | 4.07 |
Avery Dennison Corp consistently shows a strong solvency position based on its solvency ratios over the years.
- Debt-to-assets ratio: This ratio indicates the proportion of the company's assets financed by debt. With a ratio of 0.00 for each year from 2020 to 2024, it suggests that the company has not relied on debt to finance its assets, implying a lower financial risk.
- Debt-to-capital ratio: This ratio reflects the proportion of the company's capital that is funded by debt. Similar to the debt-to-assets ratio, Avery Dennison's debt-to-capital ratio remains at 0.00 for all years, indicating that the company has not heavily utilized debt to fund its operations or investments.
- Debt-to-equity ratio: This ratio shows the level of financial leverage in a company's capital structure. Once again, the ratio remains at 0.00 for all years, indicating that Avery Dennison has not taken on significant debt in relation to its equity, demonstrating a conservative financial structure.
- Financial leverage ratio: This ratio measures the extent to which a company uses debt to finance its operations. The decreasing trend in the financial leverage ratio from 4.07 in 2020 to 3.62 in 2024 indicates a reduction in the company's reliance on debt over the years, strengthening its financial position and potentially improving its ability to weather economic downturns.
Overall, the consistent low values of these solvency ratios suggest that Avery Dennison Corp has maintained a prudent approach to managing its debt levels and financial risk, which may contribute to its financial stability and resilience in the long term.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 9.53 | 6.84 | 12.88 | 15.14 | 12.24 |
The interest coverage ratio of Avery Dennison Corp has displayed some fluctuations over the five-year period from 2020 to 2024. The ratio indicates the company's ability to meet its interest obligations using its operating income.
In 2020, the interest coverage ratio was 12.24, suggesting that the company was generating sufficient operating income to cover its interest expenses comfortably. This improved to 15.14 in 2021, indicating a stronger ability to meet interest obligations.
However, in 2023, the interest coverage ratio decreased to 6.84, which may raise concerns about the company's ability to cover its interest payments with operating income alone. It is advisable for investors and stakeholders to monitor this trend closely for any potential financial risks.
By the end of 2024, the interest coverage ratio recovered slightly to 9.53, but it still remained below the levels seen in 2021 and 2022. This suggests that Avery Dennison Corp may need to focus on improving its operating income to ensure a healthier ability to meet its interest obligations in the future.