Central Garden & Pet Company (CENT)
Solvency ratios
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.33 | 0.35 | 0.36 | 0.38 | 0.30 |
| Debt-to-capital ratio | 0.43 | 0.45 | 0.47 | 0.49 | 0.39 |
| Debt-to-equity ratio | 0.76 | 0.82 | 0.89 | 0.97 | 0.64 |
| Financial leverage ratio | 2.28 | 2.33 | 2.46 | 2.55 | 2.17 |
The solvency ratios for Central Garden & Pet Company indicate the company's ability to meet its long-term financial obligations. Looking at the trend over the past five years:
1. Debt-to-assets ratio has shown a decreasing trend from 0.38 in 2021 to 0.33 in 2024. This indicates that the company has been effectively reducing its reliance on debt to finance its assets.
2. Debt-to-capital ratio has also decreased from 0.49 in 2021 to 0.43 in 2024, reflecting a positive trend in the company's capital structure and its ability to finance operations without excessive debt.
3. Debt-to-equity ratio has fluctuated over the years but has shown an increasing trend overall, reaching 0.76 in 2024. This suggests that the company’s level of debt relative to its equity has been rising, which could indicate increased financial risk.
4. Financial leverage ratio has also increased over the years, reaching 2.28 in 2024. This indicates that the company is increasingly using debt to finance its operations, which could potentially lead to higher financial risk.
Overall, the decreasing trends in the debt-to-assets and debt-to-capital ratios reflect a positive development in Central Garden & Pet Company's financial solvency, while the increasing trends in the debt-to-equity and financial leverage ratios suggest a higher level of financial risk that investors and stakeholders should monitor closely.
Coverage ratios
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 3.45 | 3.84 | 4.41 | 4.31 | 4.47 |
Central Garden & Pet Company's interest coverage ratio has shown a declining trend over the past five years, decreasing from 4.47 in 2020 to 3.45 in 2024. This indicates that the company's ability to cover its interest expenses with its operating income has weakened over time.
While the interest coverage ratio above 1 typically indicates that a company is able to meet its interest obligations, the downward trend observed for Central Garden & Pet Company may raise concerns about its ability to comfortably service its debt in the future.
It is important for stakeholders to closely monitor this ratio and the company's overall financial health to ensure that it can continue meeting its debt obligations without putting significant strain on its operations or risking default.