ConAgra Foods Inc (CAG)

ConAgra Foods Inc's solvency ratios provide insight into the company's ability to meet its long-term financial obligations and manage its debt levels effectively.

1. Debt-to-assets ratio: This ratio measures the proportion of the company's assets financed by debt. Over the past five years, ConAgra's debt-to-assets ratio has ranged from 0.32 to 0.40, indicating that, on average, about 32% to 40% of its assets are funded through debt. In 2024, the ratio stands at 0.36, suggesting a stable level of debt utilization to support its asset base.

2. Debt-to-capital ratio: This ratio shows the percentage of the company's capital structure funded by debt. ConAgra's debt-to-capital ratio has fluctuated between 0.45 and 0.53 in the last five years. The current ratio of 0.47 in 2024 reflects a moderate level of debt in relation to the company's total capital.

3. Debt-to-equity ratio: The debt-to-equity ratio indicates the extent to which debt is used to finance the company's operations compared to shareholders' equity. ConAgra's debt-to-equity ratio has varied from 0.81 to 1.13 over the past five years, with the ratio standing at 0.89 in 2024. This shows that the company relies more on debt financing than equity.

4. Financial leverage ratio: This ratio measures the company's financial leverage or the extent to which it uses debt to finance its assets. ConAgra's financial leverage ratio has decreased from 2.83 in 2020 to 2.47 in 2024. This indicates a slight improvement in the company's ability to cover its financial obligations with its assets.

Overall, ConAgra Foods Inc's solvency ratios suggest a consistent reliance on debt financing to support its operations and growth. The company maintains a reasonable level of debt in relation to its assets and capital, although its debt-to-equity ratio indicates a relatively higher reliance on debt compared to equity. The decreasing trend in the financial leverage ratio implies improved efficiency in managing debt levels over the past few years.

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Coverage ratios

ConAgra Foods Inc's interest coverage has shown some fluctuations over the past five years. The interest coverage ratio measures the company's ability to cover its interest expenses with its operating income.

In May 2024, ConAgra Foods Inc's interest coverage ratio was 2.62, indicating that the company's operating income was able to cover its interest expenses 2.62 times. This is a decrease from the previous year, where the ratio was 3.50, suggesting a decrease in the company's ability to cover its interest expenses.

Although the current interest coverage ratio of 2.62 is still above 1, indicating that the company is generating enough operating income to cover its interest payments, it is lower than the ratios from the previous three years (4.09, 4.97, and 3.64). This may raise concerns about ConAgra Foods Inc's ability to comfortably meet its interest obligations.

Overall, the recent decrease in ConAgra Foods Inc's interest coverage ratio may indicate a potential increase in financial risk, and investors and creditors may want to monitor the company's financial performance closely to ensure the sustainability of its interest payments.