Edgewell Personal Care Co (EPC)

The solvency ratios of Edgewell Personal Care Co indicate the company's ability to meet its long-term financial obligations.

1. Debt-to-assets ratio: This ratio shows the proportion of the company's assets financed by debt. The trend over the past five years has been relatively stable, ranging between 0.34 and 0.37. This indicates that around 34% to 37% of the company's assets are funded by debt.

2. Debt-to-capital ratio: This ratio measures the proportion of the company's capital structure that is funded by debt. Similarly to the debt-to-assets ratio, the trend has been consistent, fluctuating between 0.44 and 0.49. This indicates that debt accounts for around 44% to 49% of the company's total capital.

3. Debt-to-equity ratio: This ratio evaluates the company's financial leverage by comparing its total debt to shareholders' equity. The trend for this ratio has been fluctuating, ranging from 0.78 to 0.95 over the past five years. This indicates that the company's debt has represented between 78% and 95% of its equity.

4. Financial leverage ratio: This ratio reflects the extent to which the company relies on debt to finance its assets. The trend has varied between 2.31 and 2.53, implying that for every dollar of equity, the company has between $2.31 and $2.53 of debt.

Overall, the solvency ratios suggest that Edgewell Personal Care Co has maintained a relatively stable level of leverage over the past five years. While some fluctuations are observed, the company appears to have a prudent level of debt relative to its assets, capital structure, equity, and financial leverage.

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Coverage ratios

The interest coverage ratio measures a company's ability to cover its interest expenses with its operating income. A higher ratio indicates that the company is more capable of meeting its interest obligations.

Edgewell Personal Care Co's interest coverage ratio has shown some fluctuations over the past five years. The trend indicates that the company's ability to cover its interest expenses slightly decreased from 3.17 in 2021 to 2.58 in 2024. Despite the fluctuations, the company has generally maintained a ratio above 2, which suggests it has been able to cover its interest expenses with its operating income.

It is important to note that an interest coverage ratio above 1 indicates that the company is generating enough operating income to cover its interest expenses. However, investors and creditors generally prefer to see a higher ratio, closer to 2 or above, to ensure the company has a comfortable margin of safety.

Overall, while Edgewell Personal Care Co's interest coverage ratio has fluctuated over the years, it has generally remained at levels that indicate the company's ability to meet its interest obligations with its operating income.