Balchem Corporation (BCPC)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 1.37 | 1.52 | 1.73 | 1.37 | 1.41 |
Balchem Corporation shows a consistently strong solvency position based on its solvency ratios. The debt-to-assets ratio, debt-to-capital ratio, and debt-to-equity ratio have all remained at 0.00 from December 31, 2020, to December 31, 2024. This indicates that the company has no debt relative to its assets, capital, or equity during this period.
The financial leverage ratio, which measures the level of debt financing in relation to equity, has shown some fluctuations but generally remains at manageable levels. The ratio decreased from 1.41 in 2020 to 1.37 in 2021 and 2024, with a peak of 1.73 in 2022 and a slight decrease to 1.52 in 2023. This suggests that the company's financial leverage has been relatively stable over the years, with a minor increase in 2022.
Overall, Balchem Corporation's solvency ratios indicate a conservative capital structure with minimal reliance on debt. This signifies that the company has a solid financial position and may have lower financial risk compared to companies with higher debt levels.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 11.07 | 7.07 | 14.24 | 52.91 | 25.49 |
Balchem Corporation's interest coverage ratio, a key financial metric that indicates the company's ability to meet interest obligations on its debt, has exhibited fluctuations over the past five years. Starting at a strong level of 25.49 in December 31, 2020, the ratio improved significantly to 52.91 by December 31, 2021, reflecting the company's improved capacity to cover interest expenses with its operating income.
However, there was a decline in the interest coverage ratio to 14.24 in December 31, 2022, suggesting a potential strain in meeting interest payments relative to the preceding year. This was followed by a notable decrease to 7.07 by December 31, 2023, indicating a significant decrease in Balchem Corporation's ability to cover interest expenses with its earnings.
Although there was a slight improvement to 11.07 by December 31, 2024, the overall trend indicates a decline in the company's interest coverage ratio over the period under review. It is imperative for Balchem Corporation to closely monitor its ability to generate sufficient earnings to cover interest costs in order to ensure financial stability and mitigate potential liquidity risks.