Barnes Group Inc (B)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.24 | 0.23 | 0.26 | 0.30 |
| Debt-to-capital ratio | 0.00 | 0.30 | 0.30 | 0.34 | 0.39 |
| Debt-to-equity ratio | 0.00 | 0.42 | 0.42 | 0.51 | 0.65 |
| Financial leverage ratio | 2.43 | 1.79 | 1.80 | 1.94 | 2.16 |
The solvency ratios of Barnes Group Inc. have shown variations over the last five years. The debt-to-assets ratio has increased from 0.23 in 2021 to 0.39 in 2023, indicating that the company has taken on more debt relative to its total assets. This could raise concerns about the company's ability to cover its obligations with its existing assets.
Similarly, the debt-to-capital ratio has also increased steadily from 0.30 in 2021 to 0.49 in 2023. This suggests that a higher proportion of the company's capital structure is being funded by debt, which could increase its financial risk.
The debt-to-equity ratio has shown fluctuations but has generally been on an increasing trend, reaching 0.95 in 2023. This indicates that Barnes Group Inc. is relying more on debt financing compared to equity, which could lead to higher interest expenses and financial vulnerability.
The financial leverage ratio, which measures the proportion of the company's assets that are financed by debt, has also shown an upward trend, increasing from 1.80 in 2021 to 2.43 in 2023. This indicates that the company's reliance on debt to finance its operations and growth has been increasing, potentially magnifying its financial risk.
Overall, the increasing trend in all solvency ratios over the years highlights a heightened level of financial leverage for Barnes Group Inc., which could pose challenges in maintaining financial flexibility and meeting its debt obligations in adverse economic conditions.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 1.57 | 3.62 | 8.89 | 7.37 | 11.04 |
Interest coverage measures a company's ability to service its interest obligations on its debt using its operating income. A higher interest coverage ratio indicates a stronger ability to meet interest payments.
Looking at Barnes Group Inc.'s interest coverage over the past five years, there has been a noticeable fluctuation. The ratio was at its highest in 2019 at 11.46, indicating a robust ability to cover interest expenses. However, in the following years, the ratio declined significantly to 7.74 in 2020, 9.26 in 2021, and further dropped to 8.57 in 2022 before hitting a low of 1.53 in 2023.
The substantial decrease in interest coverage from 2019 to 2023 raises concerns about Barnes Group Inc.'s ability to meet its interest obligations with operating income. A declining trend in interest coverage could indicate increasing financial risk and potentially strain on the company's cash flow to cover interest expenses.
Further analysis and monitoring of the company's financial performance and debt management would be crucial to assess the sustainability of its interest coverage ratios going forward.