Commercial Metals Company (CMC)
Solvency ratios
| Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | Aug 31, 2020 | Aug 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 1.61 | 1.90 | 2.02 | 2.16 | 2.31 |
The solvency ratios of Commercial Metals Co. indicate the company's ability to meet its long-term financial obligations.
The debt-to-assets ratio has shown a declining trend over the past five years, decreasing from 0.33 in 2019 to 0.17 in 2023. This suggests that the company has been successful in reducing its reliance on debt to finance its assets, indicating a stronger financial position in terms of asset coverage.
Similarly, the debt-to-capital ratio has also exhibited a downward trend, declining from 0.43 in 2019 to 0.22 in 2023. This indicates that the company has reduced its dependence on borrowed capital as a source of funding, which is a positive sign for solvency.
The debt-to-equity ratio has shown a consistent decrease over the past five years, reducing from 0.77 in 2019 to 0.28 in 2023. This indicates that the company has been relying less on debt in relation to its equity, which signifies an improved ability to meet long-term obligations using shareholder funds.
The financial leverage ratio has also displayed a declining pattern, decreasing from 2.31 in 2019 to 1.61 in 2023. This suggests that the company has reduced its reliance on debt to generate earnings, which is a positive indicator of improved solvency.
Overall, the decreasing trend in these solvency ratios indicates that Commercial Metals Co. has strengthened its financial position and reduced its reliance on debt, signaling an improved ability to meet long-term obligations.
Coverage ratios
| Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | Aug 31, 2020 | Aug 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 28.96 | 30.88 | 11.29 | 7.02 | 4.75 |
The interest coverage ratio for Commercial Metals Co. has shown a consistent upward trend over the past five years, indicating the company's improving ability to cover its interest expenses. The ratio has increased from 4.77 in 2019 to 29.12 in 2023, reflecting a strong capacity to meet its interest obligations. This suggests that the company's earnings before interest and taxes (EBIT) are sufficiently high to cover its interest expenses, signaling a reduced financial risk and greater financial stability. Overall, the trend in the interest coverage ratio indicates a positive financial performance and management of interest-related obligations by Commercial Metals Co.