H B Fuller Company (FUL)

The solvency ratios of H.B. Fuller Company indicate the firm's ability to meet its long-term financial obligations and the extent to which it relies on debt to finance its operations.

The debt-to-assets ratio has shown a decreasing trend over the past five years, declining from 0.50 in 2019 to 0.39 in 2023. This implies that the company's reliance on debt in comparison to its assets has reduced, indicating a stronger financial position.

Similarly, the debt-to-capital ratio has also exhibited a declining trend, reducing from 0.62 in 2019 to 0.51 in 2023. This indicates that the company has become less dependent on debt to finance its operations relative to its capital.

The debt-to-equity ratio has also shown a decreasing trend, decreasing from 1.62 in 2019 to 1.06 in 2023. This suggests that the proportion of equity financing has increased relative to debt financing, indicating a stronger solvency position.

The financial leverage ratio, which reflects the company's reliance on debt, has also decreased consistently over the past five years, evidencing a declining trend from 3.26 in 2019 to 2.69 in 2023. This indicates a decreasing dependency on debt to boost returns for shareholders.

Overall, the decreasing trend in these solvency ratios reflects an improving financial position, indicating that H.B. Fuller Company has been effectively managing its debt and capital structure to enhance its solvency.

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Coverage ratios

The interest coverage ratio measures a company's ability to meet its interest obligations on outstanding debt. H.B. Fuller Company's interest coverage ratio has shown variability over the past five years, ranging from 2.56 to 3.92. The ratio peaked in December 2022 at 3.92, indicating an improved ability to cover interest expenses that year. However, it decreased to 2.75 in December 2023, implying a reduction in the company's ability to cover interest payments with its operating income. This downward trend suggests a potential need for the company to closely manage its interest expenses or seek opportunities to increase its operating income in order to improve its interest coverage in the future.