Armstrong World Industries Inc (AWI)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.34 | 0.39 | 0.35 | 0.40 | 0.40 |
| Debt-to-capital ratio | 0.49 | 0.55 | 0.54 | 0.60 | 0.62 |
| Debt-to-equity ratio | 0.95 | 1.22 | 1.17 | 1.53 | 1.66 |
| Financial leverage ratio | 2.83 | 3.15 | 3.29 | 3.81 | 4.09 |
Armstrong World Industries Inc. has shown a generally improving trend in its solvency ratios over the past five years. The debt-to-assets ratio has decreased from 0.41 in 2019 to 0.37 in 2023, indicating that the company has been able to decrease its reliance on debt to finance its assets. Similarly, the debt-to-capital ratio has improved from 0.63 in 2019 to 0.51 in 2023, demonstrating a better mix of debt and equity in the company's capital structure.
The debt-to-equity ratio has also shown a declining trend over the years, decreasing from 1.67 in 2019 to 1.04 in 2023. This suggests that Armstrong World Industries Inc. has been successful in reducing its debt levels relative to its equity. Additionally, the financial leverage ratio has improved significantly from 4.09 in 2019 to 2.83 in 2023, indicating that the company's reliance on debt to finance its operations has decreased.
Overall, the solvency ratios of Armstrong World Industries Inc. reflect a stronger financial position and lower risk of financial distress, as the company has been able to reduce its debt levels and increase its equity proportion in its capital structure.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 9.45 | 10.62 | 11.51 | -4.88 | 8.07 |
Armstrong World Industries Inc.'s interest coverage ratio has shown a generally stable and healthy trend over the past five years, with values ranging from 8.27 to 11.17. The interest coverage ratio indicates the company's ability to meet its interest obligations on its outstanding debt.
The consistently high values of the interest coverage ratio, such as 10.69 in 2022 and 11.17 in 2021, suggest that Armstrong World Industries Inc. has been generating sufficient operating income to cover its interest expenses comfortably. This reflects positively on the company's financial health and ability to manage its debt obligations effectively.
Although there was a slight dip in the interest coverage ratio in 2023 to 9.17, the ratio still remains at a relatively strong level, indicating that the company's earnings before interest and taxes (EBIT) are still more than adequate to cover its interest payments.
Overall, Armstrong World Industries Inc.'s consistent and robust interest coverage ratios across the years demonstrate the company's financial stability and sound debt management practices.