Flowserve Corporation (FLS)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.23 | 0.26 | 0.27 | 0.32 | 0.28 |
| Debt-to-capital ratio | 0.38 | 0.40 | 0.41 | 0.50 | 0.44 |
| Debt-to-equity ratio | 0.60 | 0.67 | 0.70 | 0.99 | 0.78 |
| Financial leverage ratio | 2.64 | 2.63 | 2.63 | 3.07 | 2.83 |
Flowserve Corp.'s solvency ratios have shown a positive trend over the past five years, indicating an improvement in the company's ability to meet its financial obligations. The debt-to-assets ratio has decreased from 0.28 in 2019 to 0.24 in 2023, suggesting that a lower proportion of the company's assets are financed by debt.
Similarly, the debt-to-capital and debt-to-equity ratios have also exhibited a declining trend, reflecting an enhanced financial structure and reduced reliance on debt financing. Particularly noteworthy is the decrease in the debt-to-equity ratio from 1.00 in 2020 to 0.64 in 2023, showcasing a significant improvement in the company's financial leverage.
The financial leverage ratio has also decreased over the years, indicating that Flowserve Corp. has been effectively managing its capital structure and maintaining a healthy balance between debt and equity financing.
Overall, the solvency ratios suggest that Flowserve Corp. is in a strong financial position, with lower debt levels relative to assets, capital, and equity. This indicates the company's ability to weather financial challenges and meet its obligations efficiently, boding well for its long-term financial stability and growth prospects.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 4.07 | 4.14 | 3.14 | 4.41 | 6.72 |
Flowserve Corp.'s interest coverage has demonstrated some fluctuations over the past five years. The interest coverage ratio measures the company's ability to meet its interest payments on outstanding debt obligations. In 2023, the interest coverage ratio improved to 5.57 from 4.66 in 2022, indicating that the company's earnings are sufficient to cover its interest expenses by 5.57 times.
It is important to note that a higher interest coverage ratio is generally seen as favorable to creditors and investors as it suggests a lower risk of default. However, the company experienced a decline in its interest coverage ratio from 2019 to 2020, followed by a gradual improvement in the subsequent years.
The trend in Flowserve Corp.'s interest coverage ratio indicates that the company has been managing its interest expenses relatively well, but investors and creditors should continue to monitor this ratio to ensure the company can continue to meet its debt obligations comfortably.