CTS Corporation (CTS)

The solvency ratios of CTS Corp., which include the debt-to-assets ratio, debt-to-capital ratio, debt-to-equity ratio, and financial leverage ratio, indicate the company's ability to meet its financial obligations and the extent of its leverage.

- Debt-to-assets ratio: This ratio measures the proportion of the company's assets financed by debt. CTS Corp.'s debt-to-assets ratio has fluctuated over the past five years, ranging from 0.08 to 0.15. The lower the ratio, the lower the financial risk for the company, indicating that a higher proportion of assets is funded by equity rather than debt.

- Debt-to-capital ratio: This ratio reflects the proportion of the company's capital structure that is financed by debt. CTS Corp.'s debt-to-capital ratio has also varied over the years, ranging from 0.10 to 0.20. A lower debt-to-capital ratio suggests a lower dependence on debt for financing the company's operations.

- Debt-to-equity ratio: This ratio shows the relationship between the company's debt and equity financing. CTS Corp.'s debt-to-equity ratio has shown fluctuations, moving between 0.11 and 0.25. A lower debt-to-equity ratio typically implies a lower level of financial risk and a healthier balance sheet structure.

- Financial leverage ratio: This ratio indicates the extent to which the company relies on debt to finance its operations. CTS Corp.'s financial leverage ratio has ranged from 1.41 to 1.59 over the past five years. A higher financial leverage ratio suggests higher financial risk, as the company is heavily reliant on debt financing.

Overall, CTS Corp. has shown fluctuations in its solvency ratios over the years, indicating varying levels of leverage and financial risk. Monitoring these ratios can provide insights into the company's financial health and its ability to meet its debt obligations.

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Coverage ratios

The interest coverage ratio measures a company's ability to pay interest expenses on its outstanding debt. A higher interest coverage ratio indicates that the company is more capable of meeting its interest obligations.

Analyzing CTS Corp.'s interest coverage over the past five years, we observe a fluctuating trend. In 2019, CTS Corp. had an interest coverage ratio of 67.18, indicating a solid ability to cover its interest payments. This ratio increased substantially to 109.61 in 2022, reflecting an improved financial position and enhanced capacity to service debt obligations.

However, looking at the following year, there was a notable drop in the interest coverage ratio to 61.50 in 2022. While this ratio still indicates a comfortable position to meet interest payments, the decrease raises some concerns about the company's ability to cover its interest expenses compared to the previous year.

Moreover, the interest coverage ratio in 2020 was 21.11, marking a significant decline from the prior year. This sharp decrease suggests a weakening ability to cover interest costs, possibly signaling financial challenges or increased debt burden during that period.

In contrast, the interest coverage ratio rebounded to 109.61 in 2022, showcasing a strong recovery and a robust capacity to service debt. Overall, CTS Corp.'s interest coverage ratio has exhibited fluctuations over the past five years, indicating varying levels of financial health and debt servicing capability. It is crucial for stakeholders to monitor this ratio closely to assess the company's ability to manage its debt obligations effectively.