Cabot Corporation (CBT)
Solvency ratios
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.30 | 0.31 | 0.22 | 0.39 | 0.34 |
| Debt-to-capital ratio | 0.46 | 0.55 | 0.43 | 0.61 | 0.51 |
| Debt-to-equity ratio | 0.87 | 1.21 | 0.76 | 1.58 | 1.03 |
| Financial leverage ratio | 2.85 | 3.93 | 3.49 | 4.02 | 3.01 |
The solvency ratios of Cabot Corp. indicate the company's ability to meet its long-term financial obligations.
The debt-to-assets ratio has shown a fluctuating trend over the past five years, decreasing to 0.35 in 2023 from 0.41 in 2022 and 0.40 in 2020, but remaining consistent with the 2019 figure. This suggests that the company has been able to reduce its reliance on debt to finance its assets in the most recent year.
Similarly, the debt-to-capital ratio has seen a decrease, reaching 0.50 in 2023 from 0.62 in 2022 and 2020, indicating that the company has reduced its dependence on debt in relation to its total capital.
The debt-to-equity ratio has also shown a declining trend to 1.01 in 2023 from 1.61 in 2022 and 1.61 in 2020. This signifies that Cabot Corp. has been able to bring down its reliance on debt in relation to equity, which is a positive indicator of solvency.
The financial leverage ratio, which measures the company's use of debt in its capital structure, has also displayed a decreasing trend, dropping to 2.85 in 2023 from 3.93 in 2022 and 4.02 in 2020. This implies that the company has been employing less debt to finance its assets and operations.
Overall, the declining trend in these solvency ratios indicates that Cabot Corp. has been reducing its reliance on debt and effectively managing its financial leverage, thereby strengthening its solvency position. This trend is generally positive and suggests improved financial stability and lower risk of default.
Coverage ratios
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 5.63 | 6.55 | 8.61 | 0.11 | 4.85 |
Certainly! The interest coverage ratio for Cabot Corp. has fluctuated over the past five years. In 2023, the interest coverage ratio stood at 9.05, indicating the company's ability to cover its interest expenses approximately 9 times with its earnings before interest and taxes (EBIT). This represents a decrease from the previous two years, where the ratios were 12.93 and 11.15 in 2022 and 2021, respectively. These higher ratios suggest stronger ability to meet interest obligations.
However, in 2020, the interest coverage ratio dropped to 3.42, indicating a significant decrease in the company's ability to cover its interest expenses. The ratio improved slightly in 2019 to 6.72, compared to the previous year, yet remained lower than the subsequent years. This fluctuation may reflect changes in the company's EBIT and interest expenses, which would warrant further investigation to determine the underlying causes. Overall, the trend in the interest coverage ratio suggests some variability in Cabot Corp.'s ability to service its debt obligations with current earnings.