Franklin Electric Co Inc (FELE)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 1.44 | 1.43 | 1.59 | 1.66 | 1.50 |
Based on the provided data for the solvency ratios of Franklin Electric Co Inc, the company maintains a strong financial position with consistently low debt levels and prudent leverage ratios.
1. Debt-to-assets ratio: The debt-to-assets ratio measures the proportion of a company's assets that are financed by debt. Franklin Electric Co Inc has maintained a debt-to-assets ratio of 0.00 for the years 2020 to 2024, indicating that the company has not relied on debt to finance its assets during this period. This suggests a conservative approach to managing debt levels.
2. Debt-to-capital ratio: The debt-to-capital ratio indicates the extent to which a company's operations are funded by debt relative to its total capital. Franklin Electric Co Inc also shows a debt-to-capital ratio of 0.00 for the years 2020 to 2024, reaffirming the company's minimal reliance on debt for capital structure.
3. Debt-to-equity ratio: The debt-to-equity ratio compares a company's total debt to its shareholders' equity, reflecting the degree of financial leverage. Franklin Electric Co Inc maintains a debt-to-equity ratio of 0.00 from 2020 to 2024, implying that the company's operations are predominantly funded by equity rather than debt, which is a positive sign for investors and creditors.
4. Financial leverage ratio: The financial leverage ratio indicates the proportion of a company's assets that are financed by debt relative to equity. Franklin Electric Co Inc has shown a declining trend in its financial leverage ratio from 1.50 in 2020 to 1.44 in 2024. This demonstrates improving financial stability as the company reduces its reliance on debt to finance its operations over the years.
In summary, based on the solvency ratios provided, Franklin Electric Co Inc exhibits a prudent financial management strategy characterized by low debt levels, minimal reliance on debt for financing, and decreasing financial leverage over the years, indicating a strong and sustainable financial position.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 37.69 | 21.54 | 23.32 | 37.51 | 27.73 |
The interest coverage ratio for Franklin Electric Co Inc has displayed fluctuating trends over the past five years. In 2020, the company's interest coverage ratio stood at 27.73, indicating the company generated 27.73 times more operating income than needed to cover its interest expenses. This ratio improved significantly to 37.51 in 2021, reflecting a stronger ability to meet interest obligations.
However, there was a notable decline in 2022, with the interest coverage ratio dropping to 23.32, indicating a reduced capacity to cover interest payments. The trend continued in 2023, with the ratio decreasing further to 21.54, signaling a potential strain on the company's ability to service its debt obligations.
Nonetheless, Franklin Electric Co Inc rebounded in 2024, with the interest coverage ratio improving to 37.69, surpassing the levels seen in previous years. This suggests a better ability to meet interest payments and indicates a more favorable financial position compared to the previous year.
In conclusion, while the interest coverage ratio fluctuated over the analyzed period, the company demonstrated both strengths and weaknesses in its ability to cover interest expenses. Monitoring this ratio going forward will be crucial to assess the company's financial health and its ability to manage its debt effectively.