Church & Dwight Company Inc (CHD)

The solvency ratios of Church & Dwight Company Inc indicate the company's ability to meet its long-term financial obligations.

1. Debt-to-assets ratio: This ratio decreased from 0.24 in 2020 to 0.20 in 2021 but then increased to 0.31 in 2022 before dropping to 0.26 in 2023 and 0.25 in 2024. This suggests that the company's debt relative to its total assets fluctuated over the years, with a slight downward trend in recent years.

2. Debt-to-capital ratio: Similarly, the debt-to-capital ratio showed a decrease from 0.38 in 2020 to 0.33 in 2021, followed by an increase to 0.43 in 2022 and subsequent decreases to 0.36 in 2023 and 0.34 in 2024. The fluctuations in this ratio indicate changes in the company's capital structure and reliance on debt to finance its operations.

3. Debt-to-equity ratio: The debt-to-equity ratio declined from 0.60 in 2020 to 0.50 in 2021, then rose to 0.74 in 2022, before falling to 0.57 in 2023 and 0.51 in 2024. This ratio reflects the proportion of debt relative to equity in the company's capital structure, with fluctuations indicating changes in leverage and financial risk.

4. Financial leverage ratio: The financial leverage ratio showed a slight increase from 2.45 in 2020 to 2.47 in 2021, followed by a decrease to 2.39 in 2022, 2.22 in 2023, and 2.04 in 2024. This ratio measures the company's financial leverage and its ability to generate earnings to cover interest payments. The declining trend indicates a reduction in the company's reliance on debt financing.

Overall, the solvency ratios of Church & Dwight Company Inc suggest a mixed trend in its leverage and debt management over the years, with some improvements in recent years. It is essential for stakeholders to monitor these ratios to assess the company's long-term financial health and risk exposure.

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Coverage ratios

Interest coverage is a crucial financial ratio that reflects a company's ability to meet its interest obligations with its operating profits. Analyzing Church & Dwight Company Inc's interest coverage over the past five years reveals fluctuations in its ability to cover interest expenses.

In 2020, the interest coverage ratio stood at a healthy 16.96, indicating that the company's operating profits were almost 17 times higher than its interest expenses, suggesting a strong financial position.

By the end of 2021, the interest coverage ratio improved further to 19.93, signaling an even stronger ability to cover interest costs. This increase indicates continued operational efficiency and financial stability.

However, there was a notable decline in 2022, with the interest coverage ratio dropping to 6.84. While still above 1, implying the company's ability to cover interest expenses with operating profits, the decrease suggests a potential increase in the relative burden of interest payments.

The ratio recovered slightly in 2023, reaching 9.72, but remained below the levels seen in 2020 and 2021. This improvement may indicate management efforts to enhance earnings relative to interest costs.

By the end of 2024, the interest coverage ratio was at 8.96, still below the levels observed in the earlier years. This suggests that despite some recovery, there may be ongoing pressure on the company's ability to comfortably cover interest expenses with operating profits.

In conclusion, the analysis of Church & Dwight Company Inc's interest coverage indicates varying levels of performance over the past five years, with periods of strength and challenges. It is essential for the company to monitor and manage its interest coverage ratio effectively to ensure financial stability and sustainable growth in the future.