CSW Industrials Inc (CSWI)
Solvency ratios
| Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | |
|---|---|---|---|---|---|
| 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 | 1.69 | 1.98 | 2.12 | 2.12 | 1.33 |
Solvency ratios provide insight into a company's ability to meet its long-term financial obligations. In the case of CSW Industrials Inc, we observe a favorable trend in solvency ratios over the past five years. The debt-to-assets ratio has decreased steadily from 0.27 in 2021 to 0.16 in 2024, indicating that the company has reduced its reliance on debt financing in relation to its total assets.
Similarly, the debt-to-capital and debt-to-equity ratios have shown a declining trend, signaling an improvement in the company's financial position. The debt-to-capital ratio decreased from 0.37 in 2021 to 0.21 in 2024, while the debt-to-equity ratio decreased from 0.58 in 2021 to 0.26 in 2024. These reductions demonstrate that CSW Industrials Inc has decreased its debt levels relative to both its total capital and equity, which may imply a stronger capacity to weather financial challenges.
Furthermore, the financial leverage ratio, which reflects the extent to which a company relies on debt financing, has decreased from 2.12 in 2021 to 1.64 in 2024. This downward trend suggests that the company has become less leveraged over time, which typically indicates a lower risk of financial distress.
In summary, the solvency ratios of CSW Industrials Inc have shown improvement over the past five years, with decreasing levels of debt relative to assets, capital, equity, and leverage. This enhanced solvency position may enhance the company's ability to manage its long-term financial obligations and navigate potential economic uncertainties.
Coverage ratios
| Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 12.13 | 10.55 | 17.74 | 22.35 | 44.22 |
The interest coverage ratio measures a company's ability to meet its interest obligations on outstanding debt. A higher interest coverage ratio indicates that the company is more capable of covering its interest expenses from its operating income.
Analyzing the interest coverage ratio of CSW Industrials Inc over the past five years shows a declining trend. In March 2020, the interest coverage ratio was notably high at 49.48, indicating a strong ability to cover interest expenses almost 50 times over. However, the ratio has decreased consistently over the subsequent years, with ratios of 24.85 in 2021, 17.87 in 2022, 10.54 in 2023, and 12.51 in 2024.
While the interest coverage ratio remains above 1 in each year, indicating that CSW Industrials Inc is generating enough operating income to cover its interest expenses, the downward trend raises some concerns. A decreasing interest coverage ratio could suggest potential risks if the trend continues, as the company's ability to cover interest payments may become more strained over time.
It is essential for investors and creditors to monitor CSW Industrials Inc's interest coverage ratio closely to assess the company's financial health and ability to service its debt obligations effectively.