Century Aluminum Company (CENX)

The solvency ratios of Century Aluminum Company indicate the company's ability to meet its long-term financial obligations and the extent of its leverage. The debt-to-assets ratio has been relatively stable over the years, ranging from 0.17 in 2019 to 0.26 in 2022, and currently stands at 0.23 as of December 31, 2023. This ratio suggests that around 23% of the company's assets are funded by debt.

The debt-to-capital ratio has been increasing gradually over the years, from 0.27 in 2019 to 0.55 in 2023. This indicates that debt accounts for 55% of the company's total capital structure as of the end of 2023, reflecting a greater reliance on debt financing.

The debt-to-equity ratio has shown a similar trend, rising from 0.37 in 2019 to 1.21 in 2023. This indicates that for every dollar of equity, the company has $1.21 of debt, suggesting a higher level of financial risk as of the latest period.

The financial leverage ratio has also been increasing steadily over the years, reaching 5.19 in 2023, up from 2.22 in 2019. This ratio indicates the proportion of the company's total assets that are financed by debt, signaling a higher degree of leverage and potential financial vulnerability.

Overall, the solvency ratios of Century Aluminum Company suggest a growing reliance on debt financing and increasing financial risk over the years, which could impact the company's ability to manage its debt obligations and may warrant closer monitoring of its financial health.

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Coverage ratios

The interest coverage ratio measures a company's ability to meet its interest obligations from its operating income. A higher interest coverage ratio indicates a stronger ability to cover interest expenses.

Analyzing Century Aluminum Company's interest coverage ratio over the past five years, we observe fluctuations in the company's ability to cover its interest expenses.

- In 2023, the interest coverage ratio stands at 0.90, indicating the company's operating income was just sufficient to cover its interest expenses. This may raise concerns about the company's financial health and ability to meet its debt obligations comfortably.

- In 2022 and 2020, the interest coverage ratio was negative at -5.13 and -2.55 respectively, indicating that the company's operating income was insufficient to cover its interest expenses. This could be a red flag for investors and creditors as it suggests the company may have difficulty meeting its interest obligations.

- The interest coverage ratio improved in 2021 with a ratio of 2.17, indicating that the company's operating income was more than double its interest expenses. This is a positive sign, showing an improvement in the company's ability to cover its interest payments.

- Similarly, in 2019, the interest coverage ratio was -2.88, reflecting a weak ability to cover interest expenses with operating income.

Overall, Century Aluminum Company has experienced fluctuations in its interest coverage ratio over the past five years. Investors and creditors should closely monitor this ratio to assess the company's financial health and its ability to meet debt obligations in the future.