ESCO Technologies Inc (ESE)

The solvency ratios of Esco Technologies, Inc. indicate a favorable trend in the company's ability to meet its long-term obligations. The debt-to-assets ratio has decreased from 0.20 in 2019 to 0.06 in 2023, reflecting a lower proportion of assets financed by debt. Similarly, the debt-to-capital and debt-to-equity ratios have shown a declining pattern, suggesting that the company has been reducing its reliance on debt to fund its operations and investments.

Furthermore, the financial leverage ratio has also exhibited a decreasing trend, indicating a reduction in the company's reliance on debt financing to generate earnings. This improvement in solvency ratios suggests that Esco Technologies has strengthened its financial position and reduced its financial risk over the years.

Overall, the company's solvency ratios indicate a healthier balance between debt and equity in its capital structure, which may enhance its ability to weather economic downturns and pursue future growth opportunities.

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Coverage ratios

The interest coverage ratio measures a company's ability to pay the interest on its outstanding debt. Esco Technologies, Inc.'s interest coverage ratio has exhibited some fluctuations over the past five years, ranging from 13.44 to 36.38. In 2023, the interest coverage ratio stood at 14.78, down from the previous year's 22.88, indicating a decreased ability to cover interest expenses from operating income. The decline in the ratio may raise concerns about the company's ability to meet its interest obligations, especially when compared to the higher ratios in 2021 and 2022. It is essential for stakeholders to monitor this trend closely to assess the company's financial health and its capacity to service its debt obligations.