Fortune Brands Innovations Inc. (FBIN)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.41 | 0.34 | 0.29 | 0.35 | 0.28 |
| Debt-to-capital ratio | 0.54 | 0.50 | 0.43 | 0.48 | 0.42 |
| Debt-to-equity ratio | 1.16 | 0.99 | 0.75 | 0.93 | 0.74 |
| Financial leverage ratio | 2.86 | 2.93 | 2.59 | 2.65 | 2.59 |
Fortune Brands Innovations Inc.'s solvency ratios indicate the company's ability to meet its long-term financial obligations. Over the past five years, the debt-to-assets ratio has shown an increasing trend, from 0.28 in 2019 to 0.41 in 2023, suggesting that a larger portion of the company's assets are funded by debt. This could indicate a higher level of financial risk.
Similarly, the debt-to-capital ratio has also increased from 0.42 in 2019 to 0.54 in 2023, showing a rising dependency on debt for funding the company's operations. The debt-to-equity ratio has displayed a fluctuating pattern but generally upward trend, reaching 1.16 in 2023. This indicates that the company is relying more on debt financing relative to equity, which can magnify financial risks and impact the company's creditworthiness.
The financial leverage ratio has been fluctuating around the 2.6 to 2.9 range over the past five years, indicating that the company is using around 2.6 to 2.9 times more debt to finance its assets compared to equity. This suggests that the company's capital structure is slightly debt-heavy, which could potentially strain its financial flexibility and increase interest payment obligations.
In summary, Fortune Brands Innovations Inc.'s solvency ratios have shown a general trend of increased leverage over the years, indicating a growing reliance on debt financing. This trend suggests potential risks associated with the company's ability to meet its financial obligations in the long run.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 5.28 | 7.83 | 12.14 | 8.92 | 7.11 |
The interest coverage ratio for Fortune Brands Innovations Inc. has shown a declining trend over the past five years. In 2023, the interest coverage ratio was 5.28, lower than the previous year's ratio of 7.83. This indicates that the company's ability to cover its interest expenses with its earnings has weakened.
Although the 2023 ratio of 5.28 is still positive, it is significantly lower than the ratios in 2021 and 2020, which were 12.14 and 8.92, respectively. This suggests that the company may be experiencing challenges in generating sufficient operating income to cover its interest obligations.
Additionally, when comparing the 2023 ratio to the 2019 ratio of 7.11, it is evident that the company's interest coverage has fluctuated over the years, possibly due to changes in the company's financial structure or profitability.
Overall, the declining trend in Fortune Brands Innovations Inc.'s interest coverage ratio raises concerns about its ability to comfortably meet its interest payments from its operating earnings in the future.