Ecolab Inc (ECL)
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 | 0.37 | 0.30 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.52 | 0.42 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 1.08 | 0.72 |
| Financial leverage ratio | 2.72 | 2.97 | 2.94 | 2.94 | 2.40 |
Ecolab, Inc.'s solvency ratios indicate its ability to meet its long-term obligations and manage financial leverage. The trend in the debt-to-assets ratio has been relatively stable over the past five years, ranging from 0.30 in 2019 to 0.41 in 2021, but decreasing to 0.37 in 2023. This suggests that Ecolab has been able to maintain a lower level of debt in relation to its total assets.
Similarly, the debt-to-capital and debt-to-equity ratios have followed a similar trend, with slight fluctuations over the years. The debt-to-capital ratio decreased from 0.42 in 2019 to 0.50 in 2023, indicating that Ecolab has been using a lower proportion of debt in its capital structure.
The debt-to-equity ratio, which also measures leverage, has shown some variability, ranging from 0.73 in 2019 to 1.21 in 2021 before decreasing to 1.02 in 2023. This suggests that Ecolab relies more heavily on debt financing compared to equity, but the ratio has improved in the most recent year.
Additionally, the financial leverage ratio has also demonstrated some fluctuations, from 2.40 in 2019 to 2.94 in 2021 before declining to 2.72 in 2023. This ratio indicates the extent to which Ecolab is using debt to finance its assets. Overall, the solvency ratios suggest that Ecolab has been managing its debt levels effectively, with a slight improvement in leverage in the most recent year.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 5.97 | 6.20 | 6.93 | 4.58 | 8.61 |
The interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt. A higher interest coverage ratio indicates that the company is more capable of servicing its debt obligations.
Ecolab, Inc.'s interest coverage ratio has fluctuated over the past five years, ranging from 5.43 to 11.64. The trend shows some volatility, with the ratio peaking in 2019 at 11.64 and dipping to its lowest point in 2020 at 5.43.
Despite the fluctuations, Ecolab, Inc.'s interest coverage has generally been above 5 in all years, indicating that the company has had adequate earnings to cover its interest expenses. The ratio improved in 2021 and 2023 compared to the prior years, signifying a stronger ability to meet its interest obligations.
Overall, Ecolab, Inc.'s interest coverage ratio suggests that the company has managed its debt obligations effectively, although variations in the ratio over time may warrant further investigation into the company's financial health and its ability to generate consistent earnings to cover interest payments.