Flowers Foods Inc (FLO)

Flowers Foods Inc's solvency ratios provide insight into the company's ability to meet its long-term financial obligations and manage its debt levels effectively.

The debt-to-assets ratio has shown a slight increasing trend from 2019 to 2023, indicating that a higher proportion of the company's assets are financed by debt over the years. However, the ratio remains relatively stable around 0.27 to 0.31 during this period, suggesting that Flowers Foods has maintained a conservative level of debt relative to its total assets.

The debt-to-capital and debt-to-equity ratios demonstrate a similar pattern, showing a gradual increase from 2019 to 2023. These ratios indicate the proportion of the company's capital or equity that is funded by debt, with higher values indicating higher financial leverage. Flowers Foods' debt-to-capital ratio increased from 0.38 in 2019 to 0.44 in 2023, while the debt-to-equity ratio rose from 0.62 to 0.78 over the same period. These trends suggest that the company has been relying more heavily on debt financing to support its operations.

The financial leverage ratio, which measures the company's total assets relative to its equity, has also increased over the years, from 2.30 in 2019 to 2.54 in 2023. This implies that Flowers Foods has been utilizing more leverage to generate returns for its shareholders.

Overall, based on these solvency ratios, Flowers Foods Inc appears to have gradually increased its reliance on debt to fund its operations and investments, which may pose some risk in terms of financial stability and repayment obligations. It is essential for the company to carefully manage its debt levels to ensure sustainable growth and financial health in the long run.

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Coverage ratios

Flowers Foods Inc's interest coverage ratio has shown some fluctuations over the past five years, ranging from a low of 5.29 in 2023 to a high of 11.33 in 2022. The interest coverage ratio indicates the company's ability to meet its interest payment obligations from its operating income. A higher interest coverage ratio is generally favorable as it suggests that the company is generating sufficient operating income to cover its interest expenses.

The significant decrease in the interest coverage ratio from 2022 to 2023 may raise concerns about Flowers Foods Inc's ability to comfortably meet its interest payments from its operating earnings. It is important to monitor this trend closely to assess the company's financial health and its ability to manage its debt obligations effectively.

Overall, while the company's interest coverage ratio has shown some variability, it is still within acceptable levels, indicating that Flowers Foods Inc has been able to meet its interest payment obligations adequately in recent years. However, investors and stakeholders should continue to monitor this ratio to ensure the company's financial stability and sustainability.