Energizer Holdings Inc (ENR)

The solvency ratios of Energizer Holdings Inc over the past five years reflect its ability to meet its long-term financial obligations and manage its debt levels effectively:

1. Debt-to-assets ratio:
- The debt-to-assets ratio has shown a consistent upward trend from 0.58 in 2020 to 0.74 in 2024, indicating that a higher proportion of the company's assets are financed by debt. This suggests that Energizer has been relying more on debt to fund its operations and investments.

2. Debt-to-capital ratio:
- The debt-to-capital ratio has fluctuated slightly between 0.90 and 0.96 over the five-year period, indicating that debt has constituted around 90-96% of the company's total capital structure. This implies that Energizer has been heavily reliant on debt financing to support its operations and growth initiatives.

3. Debt-to-equity ratio:
- The debt-to-equity ratio has exhibited significant variability, ranging from 9.37 to 26.79 over the period. The substantial increase in 2022 suggests a higher level of financial leverage, with debt representing 26.79 times the equity in that year. This elevated ratio indicates a higher financial risk and reliance on debt to finance the company's activities.

4. Financial leverage ratio:
- The financial leverage ratio, which measures the proportion of total assets financed by equity, debt, and other liabilities, has shown fluctuations over the five years. The ratio peaked at 35.01 in 2022, reflecting a high degree of leverage that year, and decreased in subsequent years. This indicates that Energizer's financial risk and reliance on debt were particularly high in 2022 compared to other years.

In conclusion, the solvency ratios of Energizer Holdings Inc suggest that the company has been increasing its reliance on debt to finance its activities over the past five years, leading to higher financial leverage and potential risks associated with debt financing. Investors and stakeholders should closely monitor these ratios to assess the company's ability to manage its debt levels and meet its long-term financial obligations effectively.

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Coverage ratios

Energizer Holdings Inc's interest coverage ratio has shown fluctuations over the past five years. In 2024, the interest coverage ratio stands at 1.35, indicating that the company generated $1.35 in operating income for every dollar of interest expense. This suggests a moderate ability to cover interest payments.

Compared to the previous year where the ratio was 2.04, there has been a decrease in coverage, potentially signaling a reduction in the company's ability to meet interest obligations from its operating earnings.

In 2022, the interest coverage ratio was negative at -0.93, implying that the company's operating income was insufficient to cover its interest expenses during that period. This is a concerning sign as it indicates financial distress.

The significant improvement in 2023 with an interest coverage ratio of 1.95 suggests a recovery in the company's ability to handle interest payments. Additionally, the ratio in 2020 was a low 0.63, indicating weak coverage and a higher risk of default on interest payments.

Overall, the trend in interest coverage ratios for Energizer Holdings Inc shows variability, with some years indicating stronger ability to cover interest expenses, while others highlight potential financial strain and inadequate coverage. Investors and stakeholders should closely monitor this metric to assess the company's financial health and ability to meet its debt obligations.