Acuity Brands Inc (AYI)
Solvency ratios
| Aug 31, 2024 | Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | Aug 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.13 | 0.15 | 0.14 | 0.14 | 0.11 |
| Debt-to-capital ratio | 0.17 | 0.20 | 0.21 | 0.19 | 0.15 |
| Debt-to-equity ratio | 0.21 | 0.25 | 0.26 | 0.24 | 0.18 |
| Financial leverage ratio | 1.60 | 1.69 | 1.82 | 1.75 | 1.64 |
The solvency ratios of Acuity Brands Inc have shown a consistent trend over the past five years. The debt-to-assets ratio has remained relatively stable, ranging from 0.11 to 0.15, indicating that the company has maintained a prudent level of debt in relation to its total assets.
Similarly, the debt-to-capital ratio has also shown a consistent pattern, with values between 0.15 and 0.21, demonstrating that Acuity Brands Inc has managed its debt levels in proportion to its total capital structure.
The debt-to-equity ratio has shown a slight increasing trend over the years, ranging from 0.18 to 0.26, implying that the company has been relying more on debt financing compared to equity financing for its operations.
The financial leverage ratio, which measures the company's total assets in relation to its equity, has also exhibited a gradual increase over the years, from 1.64 to 1.82, suggesting that Acuity Brands Inc has been using more debt to finance its operations and investments.
Overall, Acuity Brands Inc has maintained a relatively stable solvency position with moderate levels of debt in its capital structure. However, the increasing trend in the debt-to-equity ratio and the financial leverage ratio indicates a higher reliance on debt financing, which may pose some risks in terms of financial stability and liquidity management in the long run.
Coverage ratios
| Aug 31, 2024 | Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | Aug 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 21.87 | 17.01 | 19.29 | 17.37 | 13.30 |
The interest coverage ratio for Acuity Brands Inc has exhibited a generally positive trend over the past five years, indicating the company's ability to meet its interest obligations from its operating income. The ratio has ranged from 13.30 in 2020 to 21.87 in 2024, with an average of 17.36 over the period. This suggests that the company's earnings before interest and taxes (EBIT) significantly exceed its interest expenses, providing a comfortable buffer for debt repayment. With consistent improvement in the interest coverage ratio, Acuity Brands Inc appears to have a strong financial position and a lower risk of defaulting on its debt payments.