Campbell’s Co (CPB)

The analysis of Campbell’s Co solvency ratios, based on the provided data, reveals several notable characteristics. First, the debt-to-assets ratio, debt-to-capital ratio, and debt-to-equity ratio are consistently reported as zero across all dates examined. This indicates that the company maintains no reported long-term or short-term debt, suggesting either a lack of leverage or the absence of recorded liabilities in the financial data provided.

Despite the absence of debt ratios, the financial leverage ratio presents a contrasting picture. The ratio fluctuates over time, starting at approximately 3.57 in July 2022 and gradually decreasing to around 3.82 by July 2025. These ratios suggest that the company employs financial leverage, using equity and possibly other sources of capital to finance its assets. The ratios indicate that, relative to equity, the company has a leverage multiple roughly between 3.15 and 4.19 during different reporting periods.

The divergence between the debt-related ratios and the financial leverage ratio may imply the presence of off-balance sheet financing, other non-debt liabilities, or potentially an inconsistency or gap in the data reporting. Alternatively, it may also reflect a company structure that does not record traditional debt but still operates with significant leverage through other means.

In summary, the data implies that Campbell’s Co has reported no direct debt obligations during the periods examined, yet exhibits leverage characteristics as indicated by the financial leverage ratio. The stability or gradual fluctuation in these ratios over time suggests consistent capital structuring practices, although the meaning of the leverage ratio warrants further context regarding the company's capital base and accounting policies.

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Coverage ratios

The interest coverage ratio for Campbell’s Co exhibits a fluctuating trend over the observed period, reflecting variable capacity to meet interest obligations from earnings. Starting from a relatively healthy level of 5.61 in July 2022, the ratio increased to a peak of 8.55 by January 2023, indicating improved earnings relative to interest expenses during this period. Subsequently, the ratio experienced a decline, reaching approximately 6.05 in July 2023, signaling a reduction in earnings capacity or increased interest obligations.

From late 2023 onward, a notable downward trajectory is evident. By October 2024, the interest coverage ratio had decreased to 2.37, and further declines are observed in July 2024 (2.13) and October 2024 (2.37). This suggests a diminished ability of Campbell’s Co to comfortably cover interest costs, approaching more risky levels commonly considered below 3.0, which can raise concerns over financial stability.

Projections into early 2025 indicate some recovery, with ratios rising to approximately 2.48 in January and moving slightly upward to around 3.26 by July 2025. However, these figures remain relatively low compared to earlier periods, implying ongoing challenges in consistently generating sufficient earnings to cover interest expenses without strain.

Overall, the trend reflects an initial period of strengthening interest coverage, followed by a prolonged decline indicating potential tightening of earnings relative to interest payments. The decreasing trend in interest coverage ratios suggests increased financial risk, necessitating careful monitoring of earnings, debt levels, and interest obligations to assess Campbell’s Co’s long-term debt servicing capacity.