Darling Ingredients Inc (DAR)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| 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 | 2.40 | 2.42 | 1.87 | 1.94 | 2.08 |
Based on the solvency ratios provided for Darling Ingredients Inc from 2019 to 2023, we can see that the company has consistently maintained a debt-to-assets ratio, debt-to-capital ratio, and debt-to-equity ratio of 0.00 across all five years. This indicates that the company has not relied heavily on debt to finance its operations and investments, as its total debt is negligible compared to its total assets, capital, and equity.
However, when looking at the financial leverage ratio, we observe some fluctuations over the years. The financial leverage ratio has ranged from 1.87 to 2.42 during this period. In 2023, the financial leverage ratio decreased to 2.40 from 2.42 in 2022, showing a slight improvement in the company's ability to generate earnings from its assets compared to the prior year.
Overall, the consistently low debt-related ratios suggest that Darling Ingredients Inc has a solid financial position with low leverage and a conservative debt structure. The improvement in the financial leverage ratio in 2023 indicates a slightly enhanced ability to utilize its assets more efficiently to generate earnings.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 3.73 | 8.04 | 14.13 | 5.82 | 5.73 |
The interest coverage ratio measures the company's ability to meet its interest obligations on outstanding debt. A higher ratio indicates a stronger ability to cover interest expenses.
Looking at the trend for Darling Ingredients Inc over the past five years, we can see that the interest coverage ratio has fluctuated. In 2023, the ratio of 3.73 shows a decrease from the previous year's ratio of 8.04, indicating a potential decrease in the company's ability to cover interest payments using its earnings.
Comparing the 2023 ratio to 2021 and 2020, where the ratios were 14.13 and 5.82 respectively, it is evident that the company's ability to cover interest expenses has declined significantly. However, the 2023 ratio still remains higher than the 2019 ratio of 5.73, suggesting that the company is in a better position to cover interest expenses compared to five years ago.
Overall, while the 2023 interest coverage ratio for Darling Ingredients Inc has decreased compared to the previous year, it is important for the company to closely monitor and manage its interest expenses to ensure sufficient earnings to cover its debt obligations.