Crown Holdings Inc (CCK)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.45 | 0.47 | 0.44 | 0.48 | 0.61 |
| Debt-to-capital ratio | 0.74 | 0.79 | 0.76 | 0.78 | 0.82 |
| Debt-to-equity ratio | 2.78 | 3.67 | 3.17 | 3.65 | 4.56 |
| Financial leverage ratio | 6.24 | 7.73 | 7.25 | 7.59 | 7.42 |
Crown Holdings, Inc.'s solvency ratios provide insights into the company's ability to meet its financial obligations and manage its debt levels. Looking at the trend over the past five years:
1. Debt-to-assets ratio: This ratio indicates the proportion of the company's assets financed by debt. Crown Holdings, Inc. has maintained a relatively stable debt-to-assets ratio, with a slight increase from 0.45 in 2021 to 0.50 in 2023. This suggests that half of the company's assets are financed by debt.
2. Debt-to-capital ratio: This ratio reflects the percentage of the company's capital structure that is financed by debt. Crown Holdings, Inc.'s debt-to-capital ratio has also shown some stability, hovering around the 0.76 to 0.82 range over the five-year period.
3. Debt-to-equity ratio: The debt-to-equity ratio measures the company's leverage and financial risk. Crown Holdings, Inc. has shown a decreasing trend in this ratio, decreasing from 4.65 in 2019 to 3.10 in 2023. This signifies a reduction in the reliance on debt financing relative to equity.
4. Financial leverage ratio: This ratio indicates the extent to which the company is using debt to finance its operations. Crown Holdings, Inc. has seen a downward trend in the financial leverage ratio, dropping from 9.05 in 2019 to 6.24 in 2023. This suggests an improvement in the company's ability to meet its financial obligations and manage its debt levels.
Overall, Crown Holdings, Inc. has shown relative stability in its solvency ratios over the past five years, with improvements in the debt-to-equity ratio and financial leverage ratio indicating a more conservative approach to debt management. However, the company should continue to monitor and manage its debt levels to ensure long-term financial health and stability.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 2.54 | 4.42 | -1.44 | 3.68 | 2.76 |
The interest coverage ratio of Crown Holdings, Inc. has shown a general declining trend over the past five years. In 2023, the interest coverage ratio was 3.65, indicating that the company generated operating income 3.65 times greater than its interest expenses for the year. This was lower compared to the ratios of 4.93 in 2022, 5.48 in 2021, and 4.47 in 2020. The lowest ratio was recorded in 2019 at 3.32.
A decreasing trend in the interest coverage ratio may raise concerns about the company's ability to meet its interest payments from operating earnings. It suggests that the company may have a higher financial risk due to a relatively lower buffer between its operating income and interest expenses. It is important for investors and stakeholders to closely monitor this trend and assess the company's overall financial health and ability to manage its debt obligations effectively.