Crown Holdings Inc (CCK)

Solvency ratios provide important insights into a company's ability to meet its long-term financial obligations. Let's analyze the solvency ratios of Crown Holdings Inc based on the provided data:

1. Debt-to-assets ratio:
- The debt-to-assets ratio for Crown Holdings Inc has been relatively stable over the years, ranging from 0.44 to 0.48. This indicates that around 44% to 48% of the company's assets are financed by debt, with a decreasing trend in recent years. A lower ratio suggests less reliance on debt for asset financing.

2. Debt-to-capital ratio:
- The debt-to-capital ratio shows a decreasing trend from 0.78 in 2020 to 0.69 in 2024. This ratio represents the proportion of a company's capital that is financed by debt, and a lower ratio signifies a lower dependency on debt financing relative to the total capital structure.

3. Debt-to-equity ratio:
- Crown Holdings Inc's debt-to-equity ratio has decreased significantly from 3.65 in 2020 to 2.20 in 2024. This reduction indicates that the company has been reducing its reliance on debt and increasing its equity financing, which may improve its financial stability and reduce financial risk.

4. Financial leverage ratio:
- The financial leverage ratio has shown a notable decline from 7.59 in 2020 to 5.02 in 2024. A lower financial leverage ratio indicates a lower level of financial risk and suggests that the company is using less debt to support its operations, which could enhance its financial flexibility and resilience.

Overall, based on the trend analysis of these solvency ratios, Crown Holdings Inc appears to be strengthening its financial position by reducing its reliance on debt for financing and improving its overall solvency metrics over the years.

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Coverage ratios

Interest coverage is a key financial ratio used to assess a company's ability to cover its interest expenses with its operating income. Looking at the data provided for Crown Holdings Inc, we observe fluctuations in the interest coverage ratio over the years.

1. As of December 31, 2020, the interest coverage ratio was 3.68, indicating that Crown Holdings had sufficient operating income to cover its interest expenses nearly four times over, reflecting a strong financial position in that year.

2. However, by December 31, 2021, the interest coverage ratio dropped to -1.44, which suggests that the company's operating income was not sufficient to cover its interest expenses. A negative ratio implies that Crown Holdings may have faced challenges meeting its interest obligations from its operating earnings alone.

3. Fortunately, the interest coverage ratio improved significantly to 4.42 by December 31, 2022, indicating that the company's ability to cover its interest costs improved substantially compared to the previous year. This enhancement reflects better operational performance or reduced interest expenses during that period.

4. The ratio declined slightly to 2.54 by December 31, 2023, indicating a moderate decrease in Crown Holdings' ability to cover its interest expenses. Although the ratio decreased, the company still had more than double its interest obligations covered by its operating income.

5. Lastly, as of December 31, 2024, the interest coverage ratio stood at 2.34. This suggests that Crown Holdings continued to generate sufficient operating income to cover its interest expenses, although the coverage decreased slightly compared to the previous year.

In summary, Crown Holdings Inc's interest coverage ratio has shown variability over the years, with periods of strong coverage, a significant decline leading to negative coverage, and subsequent recovery. It is important for investors and stakeholders to monitor this ratio as it provides insights into the company's ability to meet its interest obligations and manage financial risk.