AZZ Incorporated (AZZ)

Solvency ratios provide insights into a company's ability to meet its long-term financial obligations. Looking at AZZ Incorporated's solvency ratios over the past five years, we observe fluctuations in the company's leverage position.

The debt-to-assets ratio has shown an increasing trend from 0.07 in 2020 to 0.43 in 2024. This indicates that a larger proportion of AZZ's assets is financed by debt, which could lead to higher financial risk.

Similarly, the debt-to-capital ratio has been on the rise, signaling an increase in the company's reliance on debt to fund its operations and investments. From 0.11 in 2020, the ratio has climbed to 0.58 in 2024, implying a higher level of financial leverage.

The debt-to-equity ratio also portrays a pattern of growth, with a notable increase from 0.12 in 2020 to 1.36 in 2024. This indicates that AZZ has been financing a larger portion of its assets through debt relative to equity, potentially increasing the company's financial risk and dependency on creditors.

Lastly, the financial leverage ratio has experienced fluctuations, peaking at 3.58 in 2023 before decreasing to 3.13 in 2024. This ratio reflects the company's overall financial risk and leverage position, with higher values suggesting greater reliance on debt financing.

Overall, the trends in AZZ Incorporated's solvency ratios suggest a shift towards higher levels of debt financing and increased financial risk over the past five years. Investors and creditors may view these developments as potential red flags regarding the company's long-term financial stability and ability to meet its obligations.

---

Coverage ratios

Interest coverage is a key financial ratio used to assess a company's ability to meet its interest expenses with its operating income. A higher interest coverage ratio indicates that the company is more capable of servicing its debt obligations.

For AZZ Incorporated, the interest coverage ratio has varied significantly over the past five years. In 2024, the interest coverage ratio improved to 2.22 from 0.65 in 2023, indicating a better ability to cover interest expenses. However, this is still lower compared to the high of 17.85 in 2022.

While the interest coverage ratio fluctuated over the years, it generally stayed above 1, suggesting that the company's operating income was sufficient to cover its interest expenses. It is important for investors and creditors to monitor this ratio as it provides insight into the company's financial health and ability to meet its debt obligations.