Cleveland-Cliffs Inc (CLF)

Solvency ratios

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020
Debt-to-assets ratio 0.34 0.22 0.21 0.21 0.18 0.19 0.22 0.24 0.23 0.23 0.23 0.25 0.28 0.30 0.30 0.33 0.32 0.51 0.52 0.49
Debt-to-capital ratio 0.51 0.36 0.33 0.34 0.28 0.30 0.34 0.38 0.35 0.39 0.41 0.44 0.49 0.57 0.62 0.71 0.73 0.84 0.85 0.83
Debt-to-equity ratio 1.06 0.55 0.49 0.51 0.40 0.43 0.51 0.60 0.55 0.64 0.69 0.79 0.95 1.34 1.66 2.40 2.67 5.32 5.61 4.82
Financial leverage ratio 3.14 2.45 2.38 2.39 2.22 2.25 2.35 2.47 2.41 2.81 2.98 3.12 3.46 4.52 5.49 7.21 8.31 10.46 10.71 9.87

The solvency ratios of Cleveland-Cliffs Inc indicate the company's ability to meet its long-term financial obligations.

1. Debt-to-assets ratio: This ratio measures the proportion of the company's assets financed by debt. Cleveland-Cliffs Inc's debt-to-assets ratio has been decreasing steadily from 0.49 in March 2020 to 0.18 in December 2023 but slightly increased to 0.22 in June 2024. A lower ratio suggests lower financial risk as the company relies less on debt to fund its assets.

2. Debt-to-capital ratio: This ratio shows the percentage of the company's capital that is financed by debt. Cleveland-Cliffs Inc's debt-to-capital ratio also exhibits a declining trend from 0.83 in March 2020 to 0.51 in December 2024, with some fluctuations in between. A decreasing ratio indicates a lower reliance on debt for financing operations and a stronger capital structure.

3. Debt-to-equity ratio: This ratio reflects the amount of debt used to finance the company's operations compared to equity. Cleveland-Cliffs Inc's debt-to-equity ratio has shown a significant decline from 4.82 in March 2020 to 1.06 in December 2024. A decreasing ratio signifies a stronger financial position with reduced financial risk and a better ability to withstand economic downturns.

4. Financial leverage ratio: This ratio measures the extent to which the company is using debt to finance its operations. Cleveland-Cliffs Inc's financial leverage ratio has decreased consistently from 9.87 in March 2020 to 3.14 in December 2024. A decreasing ratio implies lower reliance on debt, indicating improved stability and financial flexibility.

Overall, the declining trends in these solvency ratios reflect Cleveland-Cliffs Inc's efforts to reduce its reliance on debt, improve its financial flexibility, and strengthen its solvency position over the years.

Coverage ratios

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020
Interest coverage -50.40 -15.04 7.72 27.92 29.43 33.06 25.39 45.22 114.06 180.00 276.59 308.06 267.47 130.43 37.85 2.36 -2.47 -3.61 -2.17 11.32

The interest coverage ratio of Cleveland-Cliffs Inc has shown significant fluctuations over the given period, indicating varying levels of financial health and ability to meet interest obligations. In March 2020, the company had an interest coverage ratio of 11.32, suggesting a strong capacity to cover its interest expenses with operating income.

However, from June 2020 to December 2022, the interest coverage ratio turned negative, indicating that the company's operating income was insufficient to cover its interest payments during those periods. This raises concerns about the company's financial health and ability to meet its debt obligations.

The trend shifted positively from March 2023 onwards, with the interest coverage ratio improving consistently. By December 2024, the ratio had increased to -50.40. While still negative, the trend indicates a gradual recovery in the company's ability to cover its interest expenses with operating income.

Overall, the fluctuating interest coverage ratios reflect the changing financial performance and debt servicing capacity of Cleveland-Cliffs Inc over the analyzed period, highlighting the importance of monitoring and managing debt levels to ensure sustainable financial stability.