Charles River Laboratories (CRL)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 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 | 2.28 | 2.55 | 2.77 | 2.60 | 2.87 |
Based on the solvency ratios of Charles River Laboratories provided in the table, it is evident that the company has consistently maintained a low level of debt relative to its assets, capital, and equity over the past five years, with all ratios indicating zero debt. This signifies a strong financial position with minimal reliance on debt financing to fund its operations and investments.
However, it is important to note that the financial leverage ratio has shown fluctuations over the years, ranging from 2.28 in 2023 to 2.87 in 2019. This ratio measures the extent to which the company is using debt to finance its assets, with a higher ratio indicating higher financial leverage. Despite the fluctuations, the ratios across the years remain at moderate levels, indicating a reasonable balance between debt and equity in the company's capital structure.
In conclusion, the solvency ratios suggest that Charles River Laboratories has effectively managed its debt levels and maintained a healthy financial position, with a relatively conservative approach to leveraging. This should provide a stable foundation for the company's financial health and sustainability in the long term.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 5.21 | 11.40 | 7.40 | 6.16 | 5.96 |
The interest coverage ratio for Charles River Laboratories has shown variability over the past five years. In 2023, the interest coverage ratio was 5.21, decreasing significantly from the previous year's high of 11.40 in 2022. This indicates that the company's ability to cover its interest expenses with its operating income has weakened compared to the prior year. However, the ratio remains above 1, suggesting that the company is still generating sufficient earnings to cover its interest obligations.
On a longer-term basis, the interest coverage ratio has generally been healthy, ranging from 5.96 in 2019 to 11.40 in 2022. This indicates a consistent ability to meet interest payments out of operating profits. However, the decline in 2023 should be monitored closely to ensure that the company's profitability remains sufficient to cover its interest expenses.