Carpenter Technology Corporation (CRS)

The analysis of Carpenter Technology Corporation's solvency ratios based on the provided data reveals a notable profile characterized by minimal reliance on debt financing over the observed period. Specifically, the debt-to-assets ratio remains consistently at 0.00 across all dates from June 30, 2021, to June 30, 2025, indicating that the company's total assets are not financed by liabilities, and it maintains a debt-free capital structure. Similarly, the debt-to-capital ratio and the debt-to-equity ratio also persist at zero throughout the period, reinforcing the absence of leverage and debt obligations relative to the company's capital structure.

In contrast, the financial leverage ratio exhibits a steady decline from 2.13 in June 2021 to 1.85 in June 2025. This ratio, which measures the extent of a company's assets financed through equity versus debt, suggests that while leverage has been high, it has decreased modestly over time. The decreasing trend indicates a gradual reduction in the company’s reliance on debt, aligning with the other ratios that reflect an essentially debt-free status.

Overall, the data indicates that Carpenter Technology Corporation maintains an extremely conservative or debt-free financial structure, with negligible or no outstanding liabilities during the observed years. The sustained zero ratios across debt-to-asset, debt-to-capital, and debt-to-equity ratios suggest that the company relies primarily on equity financing, providing a strong buffer against insolvency risks. The decreasing financial leverage ratio further supports a trend toward lower leverage, enhancing the company's solvency profile and financial stability.

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Coverage ratios

The interest coverage ratio of Carpenter Technology Corporation has exhibited a notable improvement over the period from June 30, 2021, to June 30, 2025. Specifically, the ratio was substantially negative at -7.88 in 2021, indicating that the company faced significant challenges in meeting its interest obligations during that time, likely due to insufficient earnings or substantial interest expenses exceeding earnings before interest and taxes (EBIT).

By June 30, 2022, the interest coverage ratio improved markedly to -0.40, reflecting a reduction in the disparity between earnings and interest expense; however, the ratio remained negative, suggesting that the company was still not generating enough operating income to comfortably cover its interest costs.

A further advancement is evident by June 30, 2023, when the ratio rose to 1.98. This marks a transition to positive territory, indicating that the company's EBIT exceeded its interest expense and thereby improving its ability to service debt obligations. The positive shift signals operational and financial improvements that bolster creditor confidence.

The trend continues favorably through June 30, 2024, with the ratio reaching 4.02, demonstrating a robust ability to cover interest costs more than four times over. This level indicates strong financial health and suggests increased earnings leverage relative to debt service requirements.

Looking ahead to June 30, 2025, the ratio ascends to 10.65, reflecting a substantial strengthening of interest coverage. Such a high ratio underscores the company's enhanced capacity to meet interest obligations comfortably, minimizes financial risk, and indicates significant operational profitability relative to interest expenses.

Overall, the progression from significantly negative to strongly positive interest coverage ratios highlights a marked improvement in Carpenter Technology Corporation's financial stability and operational performance over the examined period. The trend suggests a transition from financial distress to a healthier, more sustainable debt profile.