Commercial Metals Company (CMC)

The solvency ratios for Commercial Metals Company over the past five years indicate a strong financial position with consistently low debt levels relative to assets, capital, and equity. The debt-to-assets, debt-to-capital, and debt-to-equity ratios have all remained at 0.00, suggesting that the company operates with minimal reliance on debt to finance its operations and growth.

The financial leverage ratio has displayed a declining trend from 2.16 in 2020 to 1.59 in 2024. This indicates a decreasing level of financial risk and leverage in the company's capital structure over the period. A lower financial leverage ratio signifies that a lower proportion of the company's assets are financed through debt, enhancing its solvency and reducing the potential financial risk.

Overall, the solvency ratios reflect Commercial Metals Company's ability to maintain a strong financial position with minimal debt obligations, which is positive for its long-term financial stability and ability to weather economic uncertainties.

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Coverage ratios

Commercial Metals Company's interest coverage ratio has shown fluctuating trends over the past five years. The ratio stood at 14.27 in 2024, which indicates the company generated earnings before interest and taxes (EBIT) 14.27 times higher than its interest expenses for that year.

Compared to the previous year, the interest coverage ratio decreased significantly from 28.96 in 2023 to 14.27 in 2024, suggesting a potential decline in the company's ability to cover its interest obligations out of its operating earnings. However, it is important to note that a ratio above 1 indicates that the company can meet its interest payments using its operating income.

Looking back over the last few years, the interest coverage ratio has demonstrated some level of volatility, with higher ratios in 2023 and 2022 (28.96 and 30.88, respectively) indicating stronger earnings relative to interest expenses. Conversely, lower ratios in 2021 (11.29) and 2020 (7.02) suggest a relatively weaker ability to cover interest payments with operating income during those years.

Overall, while the recent decrease in the interest coverage ratio may raise some concerns about the company's ability to service its debt obligations from its operational earnings, a historical perspective reveals variability in the company's interest coverage performance. It would be essential for stakeholders to monitor the trend in future periods to assess the company's financial health and ability to meet its debt obligations.