Deluxe Corporation (DLX)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 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 | 4.56 | 5.10 | 5.09 | 5.35 | 3.47 |
Based on the data provided, it is evident that Deluxe Corporation has consistently maintained a strong solvency position over the years. The Debt-to-assets ratio, Debt-to-capital ratio, and Debt-to-equity ratio are all calculated to be 0.00 for each year from 2020 to 2024. This indicates that the company has zero debt relative to its total assets, capital, and equity during this period.
Moreover, the Financial leverage ratio, which measures the extent to which a company is using debt to finance its operations, has decreased from 3.47 in 2020 to 4.56 in 2024. This trend suggests that Deluxe Corporation has been gradually reducing its reliance on debt financing over the years, which is a positive indicator of financial stability and prudent capital management.
Overall, the consistent zero debt ratios and declining financial leverage ratio of Deluxe Corporation signify a sound solvency position and a healthy balance sheet structure, indicating the company's ability to meet its financial obligations effectively without being heavily leveraged.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 1.62 | 1.34 | 2.27 | 3.95 | 2.12 |
Deluxe Corporation's interest coverage has shown fluctuations over the past five years. In 2020, the interest coverage ratio was 2.12, indicating that the company's operating income was sufficient to cover its interest expenses 2.12 times.
By the end of 2021, there was an improvement in the interest coverage ratio to 3.95, suggesting increased earnings compared to interest charges. This could indicate a stronger financial position for the company at that point.
However, the interest coverage ratio dropped to 2.27 by the end of 2022, signaling a potential decrease in the company's ability to cover interest payments from operating income.
The ratio further decreased to 1.34 by the end of 2023, indicating a concerning trend where the company's operating income may not be enough to cover its interest expenses adequately.
At the end of 2024, the interest coverage ratio slightly improved to 1.62, but it still remains relatively low, suggesting that Deluxe Corporation may be facing challenges in meeting its interest obligations.
Overall, the fluctuating trend in Deluxe Corporation's interest coverage ratios over the years raises concerns about the company's ability to manage its debt obligations effectively and sustainably. Further analysis of the company's financial health and strategies may be warranted to understand the underlying factors driving these changes in interest coverage.