Century Aluminum Company (CENX)

Century Aluminum Company's solvency ratios show a mixed trend over the years. The Debt-to-Assets ratio has been relatively stable from 0.17 in 2020 to 0.23 in 2023, before dropping significantly to 0.00 in 2024, indicating a decrease in the company's reliance on debt to finance its assets.

On the other hand, the Debt-to-Capital ratio and Debt-to-Equity ratio have both shown a consistent increase from 2020 to 2023, reaching their peak at 0.55 and 1.21, respectively. This suggests a higher proportion of debt in the company's capital structure and equity financing becoming more leveraged over time. However, both ratios dropped to 0.00 in 2024, possibly indicating a significant reduction or elimination of debt.

The Financial Leverage ratio has fluctuated over the years, peaking in 2023 at 5.19, indicating that the company's debt obligations were five times its equity. However, it decreased to 2.79 in 2024, reflecting a lower level of financial leverage.

Overall, the company's solvency ratios demonstrate a varied solvency position over the years, with a recent significant decrease in debt levels as evidenced by the 2024 data. Further analysis is needed to understand the reasons behind these changes and their potential impact on the company's financial health and risk profile.

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Coverage ratios

The interest coverage ratio of Century Aluminum Company has shown significant fluctuations over the past five years.

In 2020, the interest coverage ratio was -2.55, indicating that the company's earnings before interest and taxes (EBIT) were insufficient to cover its interest expenses, raising concerns about the company's ability to meet its debt obligations.

However, in 2021, the interest coverage ratio improved to 2.17, suggesting that the company's EBIT became more capable of covering its interest payments. This improvement may indicate a better financial position or operational performance during that year.

The ratio deteriorated drastically in 2022 to -5.13, signifying a significant decline in the company's ability to cover its interest expenses with its operating profits. This sharp drop could indicate financial distress or operational challenges faced by the company during that period.

By the end of 2023, the interest coverage ratio slightly increased to 0.90, though it remained below 1, implying that the company's EBIT was still insufficient to cover its interest costs. This persistent weakness in interest coverage could pose risks to the company's financial health.

Finally, in 2024, the interest coverage ratio saw a substantial improvement to 18.12, indicating a strong ability to meet interest obligations with operating income. This significant surge in the ratio might reflect enhanced profitability and financial stability for Century Aluminum Company during that year.

Overall, the fluctuating interest coverage ratios of Century Aluminum Company over the analyzed period suggest varying levels of financial strength and operational performance, highlighting the importance of monitoring this ratio for assessing the company's ability to manage its debt obligations.