Dover Corporation (DOV)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.26 | 0.27 | 0.29 | 0.34 | 0.34 |
| Debt-to-capital ratio | 0.37 | 0.41 | 0.42 | 0.48 | 0.50 |
| Debt-to-equity ratio | 0.59 | 0.69 | 0.72 | 0.92 | 0.98 |
| Financial leverage ratio | 2.22 | 2.54 | 2.48 | 2.70 | 2.86 |
Dover Corp.'s solvency ratios indicate the company's ability to meet its long-term financial obligations and the extent to which it relies on debt to finance its operations.
The trend in the debt-to-assets ratio has shown improvement over the last five years, declining from 0.35 in 2019 to 0.30 in 2023. This suggests that Dover Corp. has been able to better manage its debt relative to its total assets, which is a positive sign for creditors and investors.
Similarly, the debt-to-capital ratio has also seen a decreasing trend, falling from 0.50 in 2019 to 0.40 in 2023. This indicates that the company is relying less on debt financing compared to its total capital, which can improve its long-term financial stability.
The debt-to-equity ratio shows a declining trend as well, dropping from 1.01 in 2019 to 0.68 in 2023. A decreasing debt-to-equity ratio signifies that the company has been reducing its reliance on debt in favor of equity, which can enhance Dover Corp.'s financial flexibility and reduce financial risk.
Lastly, the financial leverage ratio has also shown improvement over the years, decreasing from 2.86 in 2019 to 2.22 in 2023. A lower financial leverage ratio indicates that the company is using less debt to finance its assets, which can lower the risk of insolvency and financial distress.
Overall, based on the solvency ratios, it appears that Dover Corp. has been effectively managing its debt levels and improving its financial health over the years.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 10.67 | 12.06 | 14.18 | 8.52 | 7.70 |
Based on the data provided for Dover Corp.'s interest coverage ratio over the past five years, we can observe a generally positive trend. The interest coverage ratio measures the company's ability to meet interest obligations on its outstanding debt.
Dover Corp.'s interest coverage ratio has shown consistent improvement from 2019 to 2021, indicating the company's increasing ability to cover its interest expenses with its earnings before interest and taxes (EBIT). This improvement suggests a strengthening financial position and reduced risk of default on debt obligations.
In particular, the interest coverage ratio increased from 8.42 in 2019 to 11.60 in 2023, demonstrating Dover Corp.'s enhanced capacity to pay interest expenses. The higher the ratio, the better, as it signifies a healthier financial position and lower risk of financial distress due to inadequate coverage of interest payments.
Overall, based on the trend in Dover Corp.'s interest coverage ratio from 2019 to 2023, the company appears to be effectively managing its debt obligations and generating sufficient earnings to cover interest expenses, which bodes well for its financial stability and creditworthiness.