Cleveland-Cliffs Inc (CLF)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.34 | 0.18 | 0.23 | 0.28 | 0.32 |
| Debt-to-capital ratio | 0.51 | 0.28 | 0.35 | 0.49 | 0.73 |
| Debt-to-equity ratio | 1.06 | 0.40 | 0.55 | 0.95 | 2.67 |
| Financial leverage ratio | 3.14 | 2.22 | 2.41 | 3.46 | 8.31 |
Cleveland-Cliffs Inc's solvency ratios exhibit a generally improving trend over the years from 2020 to 2024. The Debt-to-assets ratio has decreased steadily from 0.32 in 2020 to 0.18 in 2023 before rising slightly to 0.34 in 2024. This indicates the company's ability to meet its obligations with its assets without relying heavily on debt.
Similarly, the Debt-to-capital ratio also shows a decreasing trend, dropping from 0.73 in 2020 to 0.28 in 2023, with a slight increase to 0.51 in 2024. This suggests a decreasing reliance on debt capital in funding the company's operations.
The Debt-to-equity ratio has shown a significant decline from 2.67 in 2020 to 0.40 in 2023, indicating a strengthening financial position with reduced debt relative to equity. However, there was a slight increase to 1.06 in 2024, signaling a potential increase in leverage.
The Financial leverage ratio, reflecting the company's use of debt to finance its assets, has also decreased substantially over the years, from 8.31 in 2020 to 2.22 in 2023, before rising to 3.14 in 2024. This downward trend implies a decrease in the proportion of debt in the company's capital structure, contributing to improved financial stability.
Overall, the declining trend in most solvency ratios for Cleveland-Cliffs Inc indicates a strengthening financial position and lower reliance on debt for its operations, with a slight uptick in 2024 possibly needing further monitoring to ensure continued financial stability.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | -50.40 | 29.43 | 114.06 | 267.47 | -2.49 |
The interest coverage ratio for Cleveland-Cliffs Inc has shown significant fluctuations over the years based on the provided data. As of December 31, 2020, the ratio was negative at -2.49, indicating that the company's earnings were insufficient to cover its interest expenses. However, there was a substantial improvement in the ratio by December 31, 2021, soaring to 267.47, suggesting a strong ability to meet interest obligations.
In the following years, the interest coverage ratio remained relatively healthy, with values of 114.06 as of December 31, 2022, and 29.43 as of December 31, 2023. However, by the end of December 31, 2024, the ratio turned negative again at -50.40, reflecting a potential strain on the company's ability to cover its interest costs with operating profits.
Overall, it is evident that Cleveland-Cliffs Inc experienced fluctuations in its interest coverage ratio over the years, indicating varying levels of financial health and ability to service debt obligations. Further analysis would be required to understand the underlying reasons behind these fluctuations and assess the company's overall financial sustainability.