Compass Minerals International Inc (CMP)
Solvency ratios
| Sep 30, 2023 | Sep 30, 2022 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.44 | 0.58 | 0.57 | 0.53 | 0.56 |
| Debt-to-capital ratio | 0.61 | 0.79 | 0.77 | 0.71 | 0.71 |
| Debt-to-equity ratio | 1.54 | 3.70 | 3.43 | 2.48 | 2.45 |
| Financial leverage ratio | 3.49 | 6.41 | 5.98 | 4.72 | 4.38 |
The solvency ratios of Compass Minerals International Inc show the company's ability to meet its long-term financial obligations. The debt-to-assets ratio decreased from 0.58 in 2018 to 0.44 in 2023, indicating an improvement in the company's ability to cover its liabilities with its assets. Similarly, the debt-to-capital and debt-to-equity ratios also show decreases over the same period, reflecting a reduction in the company's reliance on debt to finance its operations.
The financial leverage ratio, which measures the extent to which the company is using debt to finance its assets, decreased from 4.38 in 2018 to 3.52 in 2023. This signifies a positive trend in the company's financial structure, indicating a lower level of financial risk and dependency on debt financing.
Overall, the decreasing trend in these solvency ratios suggests that Compass Minerals International Inc has been successful in managing its long-term debt levels and improving its financial stability over the analyzed period.
Coverage ratios
| Sep 30, 2023 | Sep 30, 2022 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Interest coverage | 1.59 | 1.18 | 2.04 | 2.05 | 2.51 |
The interest coverage ratio for Compass Minerals International Inc has fluctuated over the years, indicating variations in its ability to cover interest expenses. In September 2023, the interest coverage improved to 1.51 compared to 0.68 in September 2022, suggesting a stronger capacity to meet interest obligations from operating income. However, the ratio remains below the levels seen in 2019 and 2018, indicating potential challenges in servicing debt from earnings. It is essential for stakeholders to monitor this trend closely to assess the company's ability to manage its interest payments.