Core & Main Inc (CNM)

Core & Main Inc's solvency ratios provide key insights into the company's ability to meet its long-term financial obligations.

1. Debt-to-assets ratio:
- In 2024, the debt-to-assets ratio increased to 0.37 from 0.29 in 2023, indicating that the company relied more on debt to fund its assets.
- However, the ratio remained relatively stable compared to 0.33 in 2022, suggesting that the company's asset base continued to support its debt levels.

2. Debt-to-capital ratio:
- The debt-to-capital ratio increased to 0.56 in 2024 from 0.45 in 2023, showing a higher proportion of capital financed by debt.
- This trend indicates a potential increase in financial risk as a larger portion of the company's capital structure is funded through debt.

3. Debt-to-equity ratio:
- The debt-to-equity ratio jumped to 1.28 in 2024, significantly higher than 0.83 in 2023 and 1.10 in 2022.
- A higher debt-to-equity ratio signifies higher financial leverage and could indicate that creditors have a larger stake in the company relative to shareholders.

4. Financial leverage ratio:
- The financial leverage ratio increased to 3.49 in 2024 from 2.81 in 2023, indicating a higher level of financial risk.
- This ratio shows the extent to which the company is using debt to finance its assets, with a higher ratio suggesting higher financial risk and potentially lower financial stability.

Overall, Core & Main Inc's solvency ratios reflect a mixed picture of financial health, with some ratios indicating increased reliance on debt financing and higher levels of financial risk. It is essential for the company to carefully manage its debt levels to ensure long-term sustainability and mitigate potential solvency issues.

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Coverage ratios

Core & Main Inc's interest coverage ratio has shown a fluctuating trend over the past three years. In January 2024, the interest coverage ratio declined to 7.16 from 8.48 in January 2023, indicating a weaker ability to cover interest expenses with operating income. Despite this decline, the ratio remains relatively healthy, suggesting that the company's earnings are sufficient to cover its interest obligations. Comparing to January 2022, when the interest coverage ratio was at 3.21, the current ratio indicates an improved financial position. Investors and creditors may view this as a positive sign of the company's ability to handle its interest payments, although monitoring trends in future periods is advisable to assess the company's financial health effectively.