Darling Ingredients Inc (DAR)

Based on the provided data, we can analyze the solvency ratios of Darling Ingredients Inc as follows:

1. Debt-to-assets ratio: This ratio indicates the proportion of the company's assets financed by debt. Darling Ingredients Inc had a debt-to-assets ratio of 0.00 in both 2020 and 2021, indicating that the company had no debt obligations relative to its total assets in those years. However, in 2023 and 2024, the ratio increased to 0.39, suggesting that around 39% of the company's assets were financed by debt in those years.

2. Debt-to-capital ratio: This ratio shows the percentage of a company's capital that is financed by debt. Darling Ingredients Inc maintained a debt-to-capital ratio of 0.00 in 2020, 2021, and 2022, indicating no debt financing relative to its capital structure. However, the ratio rose to 0.48 in 2023 and 0.47 in 2024, suggesting that around 48% and 47% of the company's capital, respectively, was funded by debt in those years.

3. Debt-to-equity ratio: This ratio reflects the leverage of the company by comparing its total debt to shareholders' equity. Darling Ingredients Inc had a debt-to-equity ratio of 0.00 in 2020, 2021, and 2022, indicating minimal debt in relation to equity. However, in 2023 and 2024, the ratio increased to 0.94 and 0.89, respectively, signifying that the company had almost matched its equity with debt by around 94% and 89% in those years.

4. Financial leverage ratio: This ratio measures the extent to which a company uses debt to finance its assets. Darling Ingredients Inc's financial leverage ratio fluctuated over the years, starting at 1.94 in 2020, decreasing to 1.87 in 2021, then notably increasing to 2.42 in 2022, before stabilizing around 2.40 in 2023 and 2.30 in 2024. The increasing trend in the financial leverage ratio indicates a higher reliance on debt to support the company's operations and investments.

Overall, the solvency ratios of Darling Ingredients Inc show varying levels of debt utilization and leverage over the years, with a notable increase in debt financing observed from 2023 onwards, which needs to be carefully monitored for its impact on the company's financial stability and risk profile.

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Coverage ratios

Based on the provided data, Darling Ingredients Inc's interest coverage ratio has shown fluctuations over the past five years.

As of December 31, 2020, the interest coverage ratio was 5.82, indicating that the company's operating income was able to cover its interest expenses nearly 6 times. This level suggests a moderate ability to meet its interest obligations.

By December 31, 2021, the interest coverage ratio improved significantly to 14.13, signaling a strengthened ability to cover interest costs. This substantial increase may be attributed to improved profitability or lower interest expenses.

In the following year, by December 31, 2022, the interest coverage ratio decreased to 8.04, although remaining at a relatively healthy level. This suggests that the company's operating income could cover its interest expenses around 8 times.

However, by December 31, 2023, the interest coverage ratio dropped to 3.73, indicating a potential decline in the company's ability to cover interest expenses with its operating income. A lower ratio may raise concerns about the company's financial health and ability to service its debt.

Lastly, by December 31, 2024, the interest coverage ratio surged to 83.31, representing a significant improvement and indicating a robust ability to cover interest expenses with its operating income. Such a high ratio suggests a very strong financial position, potentially resulting from higher profitability or lower interest costs during that period.

Overall, while Darling Ingredients Inc's interest coverage ratio has shown variability over the years, the company seems to have managed its interest obligations well, with some periods indicating a strong ability to service its debt and others raising potential concerns.