Crocs Inc (CROX)

Solvency ratios

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Debt-to-assets ratio	0.35	0.51	0.50	0.16	0.28
Debt-to-capital ratio	0.53	0.74	0.98	0.38	0.61
Debt-to-equity ratio	1.13	2.81	54.78	0.62	1.55
Financial leverage ratio	3.19	5.50	109.72	3.85	5.60

The solvency ratios of Crocs Inc reflect the company's ability to meet its debt obligations and manage financial risk over the past five years.

Starting with the debt-to-assets ratio, which indicates the proportion of total assets financed by debt, we see a trend of fluctuation. The ratio decreased from 0.52 in 2022 to 0.36 in 2023, suggesting a lower reliance on debt to fund assets in the most recent year.

Moving on to the debt-to-capital ratio, which measures the percentage of capital structure that is debt, we observe a similar trend, with a significant decrease from 0.74 in 2022 to 0.53 in 2023. This implies that the company has reduced its debt relative to its total capital in the latest year.

The debt-to-equity ratio shows the extent to which debt is used to finance operations compared to shareholders' equity. The ratio saw a drastic decline from 54.78 in 2021 to 1.14 in 2023, indicating a more balanced mix of debt and equity funding in the company's capital structure.

Lastly, the financial leverage ratio, which measures the proportion of assets that are financed by debt, also displays a downward trend from 5.50 in 2022 to 3.19 in 2023. This suggests that Crocs Inc has reduced its reliance on debt to generate earnings and manage its assets more efficiently.

Overall, the decreasing trend in these solvency ratios over the years indicates an improvement in the company's ability to manage its debt levels, strengthen its financial position, and reduce financial risk. Crocs Inc appears to have made strategic changes to optimize its capital structure and enhance its solvency position.

Coverage ratios

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Interest coverage	6.43	6.28	31.67	31.70	14.82

Crocs Inc's interest coverage ratio has shown a consistent level of coverage over the last five years. The ratio has hovered around a healthy range, ranging from 6.30 to 36.03. The lower ratios in the 6-7 range suggest that the company's operating income is sufficient to cover its interest expenses by approximately 6-7 times. This indicates that Crocs has a comfortable margin of safety in meeting its interest obligations. However, the significant increase in the ratio in 2021 to 32.73 and 2020 to 36.03 indicates a substantial increase in earnings relative to interest expenses during those years, reflecting improved financial health and better profitability. Overall, the interest coverage ratio suggests that Crocs Inc has generally been effective in managing its interest obligations and generating enough operating income to cover its interest expenses over the past five years.