ESAB Corp (ESAB)

ESAB Corp's solvency ratios indicate a strong financial position with consistently low levels of indebtedness over the five-year period from 2020 to 2024.

1. Debt-to-assets ratio: The ratio measures the proportion of a company's assets financed by debt. ESAB Corp maintained a debt-to-assets ratio of 0.00 across all the years, signifying that the company has not relied on debt to finance its assets.

2. Debt-to-capital ratio: This ratio assesses the proportion of a company's capital structure that is contributed by debt. ESAB Corp also recorded a debt-to-capital ratio of 0.00 for each year, implying that the company's capital structure was predominantly composed of equity rather than debt.

3. Debt-to-equity ratio: The debt-to-equity ratio indicates the extent to which a company is leveraged through debt. ESAB Corp demonstrated a debt-to-equity ratio of 0.00 for every year, suggesting that the company's debt level relative to its equity remained at negligible levels.

4. Financial leverage ratio: This ratio measures the extent to which a company is using debt to finance its operations. Despite a slight increase from 1.35 in 2020 to 2.28 in 2024, ESAB Corp's financial leverage ratio remained relatively low, indicating that the company's operations were largely funded by equity rather than debt.

Overall, ESAB Corp's solvency ratios reflect a conservative financial strategy with minimal reliance on debt financing, which may indicate a strong ability to weather economic downturns and meet its financial obligations.

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Coverage ratios

ESAB Corp's interest coverage ratio has shown a generally positive trend over the past five years. In 2020, the interest coverage ratio was 5.35, indicating that the company earned 5.35 times the amount needed to cover its interest expenses. This ratio improved to 8.02 in 2021 and further increased to 9.30 in 2022, reflecting a strong ability to meet interest payments comfortably.

However, there was a slight decline in the interest coverage ratio in 2023 to 4.65, suggesting a potential decrease in the company's ability to cover interest expenses with operating income. The ratio then improved again in 2024 to 6.71, signaling a recovery in the company's interest coverage position.

Overall, ESAB Corp's interest coverage has shown fluctuations but generally remains at levels that indicate a healthy ability to meet its interest obligations. Monitoring this ratio over time can provide insights into the company's financial health and its ability to manage debt effectively.