Calavo Growers Inc (CVGW)
Solvency ratios
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.02 | 0.02 | 0.02 | 0.02 | 0.02 |
| Debt-to-capital ratio | 0.03 | 0.03 | 0.03 | 0.03 | 0.02 |
| Debt-to-equity ratio | 0.03 | 0.03 | 0.03 | 0.03 | 0.02 |
| Financial leverage ratio | 1.85 | 1.73 | 1.98 | 1.69 | 1.37 |
The solvency ratios of Calavo Growers, Inc provide insights into the company's ability to meet its long-term financial obligations.
The debt-to-assets ratio measures the proportion of total assets financed by debt. It shows a fluctuating pattern over the past five years, with a significant increase in 2023 compared to the previous year. This indicates a higher reliance on debt to finance assets, which may pose a greater risk to the company's financial stability.
The debt-to-capital ratio reflects the percentage of capital that is funded by debt. Similar to the debt-to-assets ratio, it also shows a notable increase in 2023 compared to the previous year, suggesting an elevated level of debt relative to the company's total capital.
The debt-to-equity ratio compares the company's total debt to its shareholders' equity, indicating the extent to which shareholders' equity could cover outstanding debt. Like the previous ratios, it shows an upward trend in 2023, which implies a higher level of financial risk associated with the company's capital structure.
The financial leverage ratio measures the extent to which the company uses debt to finance its assets. It shows a consistent increase over the past five years, signifying an amplified reliance on debt financing, which may potentially increase the company's financial risk.
Overall, the solvency ratios of Calavo Growers, Inc suggest a growing reliance on debt financing, which may raise concerns about the company's ability to meet its long-term financial obligations and maintain financial stability. It is essential for stakeholders to assess the company's debt management strategies and closely monitor its solvency position.
Coverage ratios
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 0.04 | -0.78 | -0.34 | -19.43 | 53.24 |
The interest coverage ratio reflects Calavo Grower's ability to meet its interest obligations with its earnings. Looking at the trend over the past five years, the interest coverage ratio has varied significantly.
In 2023, the interest coverage ratio stands at 1.42, indicating that the company's operating income covers its interest expense 1.42 times. This suggests a lower ability to cover interest payments compared to the previous year.
In 2022, the interest coverage ratio was 6.39, portraying a strong ability to cover interest expenses, indicating that the company generated significant earnings relative to its interest obligations.
However, in 2021, the interest coverage ratio was negative at -2.10, suggesting that the company's operating income was insufficient to cover its interest expenses. This is a concerning sign, as it implies that the company's financial health may be at risk.
Notably, data for 2020 and 2019 is not available, so we cannot evaluate the trend across consecutive years. In conclusion, the fluctuating interest coverage ratio of Calavo Growers, Inc raises concerns about its ability to manage interest payments and underscores the importance of closely monitoring its financial performance.