Crown Holdings Inc (CCK)

Solvency ratios

Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Debt-to-assets ratio 0.45 0.44 0.48 0.49 0.47 0.47 0.38 0.39 0.44 0.38 0.47 0.49 0.48 0.51 0.52 0.56 0.61 0.52 0.55 0.57
Debt-to-capital ratio 0.74 0.73 0.76 0.78 0.79 0.80 0.76 0.76 0.76 0.71 0.78 0.77 0.78 0.81 0.82 0.84 0.82 0.83 0.87 0.89
Debt-to-equity ratio 2.78 2.67 3.13 3.47 3.67 4.03 3.14 3.11 3.17 2.47 3.48 3.31 3.65 4.21 4.41 5.19 4.56 4.97 6.61 7.77
Financial leverage ratio 6.24 6.12 6.52 7.10 7.73 8.54 8.28 7.93 7.25 6.55 7.38 6.81 7.59 8.19 8.41 9.33 7.42 9.47 12.03 13.54

Crown Holdings, Inc.'s solvency ratios show a consistent trend over the past eight quarters. The debt-to-assets ratio has remained relatively stable around 0.49 to 0.51, indicating that approximately 50% of the company's total assets are financed by debt. This suggests that Crown Holdings has a moderate level of leverage in its capital structure.

The debt-to-capital ratio has also shown stability, ranging between 0.75 and 0.79 over the same period. This metric indicates that debt represents around 75% to 79% of the company's total capital, which consists of debt and equity. The stability of this ratio suggests that Crown Holdings has maintained a relatively balanced mix of debt and equity in its capital structure.

However, the debt-to-equity ratio has exhibited more variability, fluctuating between 3.02 and 4.13. This ratio indicates that the company's total debt is significantly higher than its equity, with values exceeding 3.00 across all quarters. A higher debt-to-equity ratio implies higher financial risk, as a larger proportion of the company's capital is funded by debt as opposed to equity.

Finally, the financial leverage ratio has also shown significant variability, ranging from 6.12 to 8.54. This ratio reflects the extent to which the company is using debt to finance its assets, with higher values indicating higher financial leverage. The increasing trend in the financial leverage ratio over the quarters suggests that Crown Holdings has been relying more on debt to support its operations and investments, which may increase the company's financial risk and interest expense.

Overall, Crown Holdings, Inc. appears to have maintained a moderate level of solvency, as indicated by the stable debt-to-assets and debt-to-capital ratios. However, the increasing trend in the debt-to-equity and financial leverage ratios raises concerns about the company's increasing reliance on debt financing, which may warrant closer monitoring of its financial health and risk management strategies.

Coverage ratios

Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Interest coverage 2.54 2.68 2.74 3.47 4.42 -1.00 -1.11 -1.52 -1.44 4.42 4.77 4.32 3.68 3.34 3.01 3.04 3.01 2.75 2.59 2.48

The interest coverage ratio measures a company's ability to pay interest on its outstanding debt using its earnings before interest and taxes (EBIT). A higher interest coverage ratio indicates that the company is more capable of meeting its interest obligations.

Based on the historical data provided, Crown Holdings, Inc. has exhibited a declining trend in its interest coverage ratio over the past eight quarters. In Q4 2023, the interest coverage ratio was 3.65, slightly lower than the previous quarter. This may suggest that the company's ability to cover its interest expenses with its operating income has weakened.

Comparing the Q4 ratios to those of the previous year, there has been a noticeable decrease from 4.93 in Q4 2022 to 3.65 in Q4 2023. This decline indicates a potential deterioration in Crown Holdings, Inc.'s ability to service its debt obligations using its current earnings.

It is important for investors and stakeholders to monitor this trend closely and assess the underlying reasons for the decrease in interest coverage. A declining interest coverage ratio could signal financial distress or increased financial risk for the company. Further analysis of Crown Holdings, Inc.'s financial health and management's strategies to improve profitability and manage debt levels would be essential in understanding the implications of the decreasing interest coverage ratio.