Armstrong World Industries Inc (AWI)

Solvency ratios

Dec 31, 2024 Sep 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019
Debt-to-assets ratio 0.27 0.30 0.33 0.34 0.35 0.37 0.39 0.39 0.38 0.37 0.36 0.35 0.35 0.38 0.40 0.40 0.40 0.39 0.43 0.40
Debt-to-capital ratio 0.40 0.43 0.47 0.49 0.51 0.53 0.55 0.55 0.56 0.55 0.53 0.54 0.54 0.57 0.59 0.60 0.60 0.60 0.65 0.62
Debt-to-equity ratio 0.66 0.74 0.89 0.95 1.03 1.13 1.21 1.22 1.26 1.22 1.14 1.17 1.15 1.31 1.45 1.53 1.48 1.51 1.83 1.66
Financial leverage ratio 2.43 2.52 2.70 2.83 2.93 3.02 3.10 3.15 3.34 3.29 3.18 3.29 3.26 3.45 3.62 3.81 3.69 3.83 4.29 4.09

Armstrong World Industries Inc's solvency ratios show the company's ability to meet its long-term obligations and indicate its financial stability over time.

1. Debt-to-assets ratio: This ratio has been relatively stable, decreasing gradually from 0.40 in December 2019 to 0.27 in December 2024. A lower debt-to-assets ratio indicates a lower level of financial risk and a healthier balance sheet.

2. Debt-to-capital ratio: Similarly, the debt-to-capital ratio has shown a decreasing trend, declining from 0.62 in December 2019 to 0.40 in December 2024. This suggests that the company has been reducing its reliance on debt financing in relation to its total capital structure.

3. Debt-to-equity ratio: The debt-to-equity ratio has also decreased consistently over the period, falling from 1.66 in December 2019 to 0.66 in December 2024. A declining debt-to-equity ratio signifies a stronger financial position as the company is relying less on debt and more on equity to fund its operations.

4. Financial leverage ratio: The financial leverage ratio has decreased from 4.09 in December 2019 to 2.43 in December 2024. This indicates that Armstrong World Industries Inc has been effectively managing its debt levels relative to its equity, resulting in lower financial risk and improved solvency.

Overall, the downward trend in these solvency ratios signifies that Armstrong World Industries Inc has been strengthening its financial position, reducing its debt burden, and enhancing its capacity to meet its long-term financial obligations.

Coverage ratios

Dec 31, 2024 Sep 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019
Interest coverage 9.60 10.17 9.84 9.45 9.38 9.15 9.64 10.62 11.62 11.90 12.32 11.51 10.67 10.75 10.07 -4.88 -3.58 -2.11 -1.44 8.07

The interest coverage ratio of Armstrong World Industries Inc has fluctuated over the period indicated. Starting at 8.07 on December 31, 2019, it dropped to -1.44 on March 31, 2020, indicating a negative coverage where operating income was not sufficient to cover interest expenses. This trend continued to decline further in the subsequent quarters reaching a low of -4.88 on December 31, 2020.

From March 31, 2021, onwards, the interest coverage ratio improved significantly, showing positive coverage and peaking at 12.32 on March 31, 2022. This improvement indicates that the company's operating income was sufficient to cover its interest expenses with a comfortable margin.

Subsequently, the interest coverage ratio fluctuated around the range of 9 to 11, showing a relatively stable financial position in terms of meeting interest obligations. This indicates a healthy trend of the company generating enough income to cover its interest expenses.

Overall, the interest coverage ratio of Armstrong World Industries Inc has shown resilience and improvement over the period under consideration, with a more stable standing in recent quarters. However, continuous monitoring of this ratio is essential to ensure the company's ability to meet its interest payments and maintain financial stability.