FMC Corporation (FMC)

The solvency ratios of FMC Corp. provide insights into the company's ability to meet its long-term financial obligations.

1. Debt-to-assets ratio: This ratio indicates the proportion of the company's assets financed by debt. FMC Corp.'s debt-to-assets ratio has been relatively stable over the past five years, ranging from 0.29 to 0.33. This suggests that around 29% to 33% of the company's assets have been funded by debt.

2. Debt-to-capital ratio: The debt-to-capital ratio measures the extent to which a company is funded by debt relative to its total capital. FMC Corp.'s debt-to-capital ratio has shown a decreasing trend over the years, declining from 0.56 in 2019 to 0.47 in 2023. This indicates that the company's reliance on debt to finance its operations has decreased.

3. Debt-to-equity ratio: The debt-to-equity ratio signifies the proportion of a company's financing that comes from debt relative to equity. FMC Corp.'s debt-to-equity ratio has also exhibited a decreasing trend from 1.29 in 2019 to 0.90 in 2023. A lower debt-to-equity ratio indicates a lower level of financial risk as less debt is used to fund operations.

4. Financial leverage ratio: The financial leverage ratio highlights the amount of debt used by a company in relation to its equity. FMC Corp.'s financial leverage ratio has fluctuated over the past five years, with a peak of 3.90 in 2019 and a decrease to 2.70 in 2023. A decreasing financial leverage ratio suggests a reduction in financial risk and a stronger equity position.

Overall, FMC Corp.'s solvency ratios indicate a prudent approach to managing its debt levels and capital structure, with improvements seen in the debt-to-capital and debt-to-equity ratios over the years, which may enhance the company's financial stability and resilience in meeting its long-term obligations.

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Coverage ratios

FMC Corp.'s interest coverage ratio has shown some fluctuations over the past five years. The interest coverage ratio measures a company's ability to meet its interest obligations on outstanding debt, with higher values indicating a stronger ability to cover interest expenses.

In 2023, the interest coverage ratio was 3.24, indicating a decline compared to the previous year. This suggests that FMC Corp.'s ability to cover its interest expenses decreased in 2023. However, the ratio remained above 1, which generally indicates that the company is generating enough operating income to cover its interest payments.

In 2022 and 2021, FMC Corp. demonstrated stronger interest coverage ratios of 8.15 and 8.79, respectively. These high ratios reflect the company's robust ability to cover its interest expenses with operating income in those years.

In 2020 and 2019, the interest coverage ratios were 6.84 and 6.26, respectively. These ratios indicate a moderate ability to cover interest obligations, showing that FMC Corp. was able to generate sufficient income to meet its interest payments during those periods.

Overall, FMC Corp.'s interest coverage ratios have varied over the past five years, with some fluctuations but generally indicating that the company has maintained a reasonable ability to cover its interest expenses with operating income. It is essential for investors and stakeholders to monitor these ratios to assess the company's financial health and ability to meet its debt obligations.