Greif Bros Corporation (GEF)
Solvency ratios
| Jan 31, 2024 | Oct 31, 2023 | Jul 31, 2023 | Apr 30, 2023 | Jan 31, 2023 | Oct 31, 2022 | Jul 31, 2022 | Apr 30, 2022 | Jan 31, 2022 | Oct 31, 2021 | Jul 31, 2021 | Apr 30, 2021 | Jan 31, 2021 | Oct 31, 2020 | Jul 31, 2020 | Apr 30, 2020 | Jan 31, 2020 | Oct 31, 2019 | Jul 31, 2019 | Apr 30, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.37 | 0.36 | 0.35 | 0.37 | 0.38 | 0.34 | 0.35 | 0.35 | 0.37 | 0.35 | 0.37 | 0.39 | 0.42 | 0.42 | 0.45 | 0.47 | 0.48 | 0.49 | 0.50 | 0.52 |
| Debt-to-capital ratio | 0.52 | 0.52 | 0.52 | 0.54 | 0.54 | 0.51 | 0.54 | 0.54 | 0.59 | 0.58 | 0.59 | 0.61 | 0.66 | 0.67 | 0.69 | 0.71 | 0.70 | 0.70 | 0.71 | 0.72 |
| Debt-to-equity ratio | 1.10 | 1.09 | 1.07 | 1.17 | 1.16 | 1.04 | 1.17 | 1.18 | 1.43 | 1.36 | 1.44 | 1.57 | 1.96 | 2.03 | 2.22 | 2.40 | 2.34 | 2.35 | 2.49 | 2.62 |
| Financial leverage ratio | 3.00 | 3.06 | 3.01 | 3.14 | 3.08 | 3.11 | 3.31 | 3.33 | 3.86 | 3.84 | 3.95 | 4.07 | 4.62 | 4.78 | 4.90 | 5.10 | 4.92 | 4.79 | 4.95 | 5.07 |
Based on the solvency ratios provided for Greif Inc, we can observe the following trends:
1. Debt-to-assets ratio: The company's debt-to-assets ratio has been relatively stable over the quarters, ranging from 0.35 to 0.40. This indicates that Greif Inc finances its assets through debt to a moderate extent, with around 35% to 40% of its assets being funded by debt.
2. Debt-to-capital ratio: Similarly, the debt-to-capital ratio has shown consistency, with values ranging from 0.52 to 0.55. This ratio reveals that Greif Inc relies on debt for approximately 52% to 55% of its total capital structure, suggesting a balanced mix of debt and equity in financing its operations.
3. Debt-to-equity ratio: The debt-to-equity ratio has displayed some fluctuation, varying between 1.09 and 1.25. This metric highlights the proportion of the company's financing that stems from debt compared to equity, with ratios above 1 indicating higher debt reliance. Greif Inc's ratio indicates that it has a higher level of debt funding in relation to equity across the observed quarters.
4. Financial leverage ratio: The financial leverage ratio, which measures the company's financial risk in relation to its equity, has fluctuated notably, ranging from 3.00 to 3.33. A higher ratio signifies increased financial risk due to higher reliance on debt financing. Greif Inc's fluctuating leverage ratio reflects varying levels of financial risk and leverage employed in the business over the periods analyzed.
Overall, Greif Inc's solvency ratios demonstrate a stable and balanced approach to debt utilization, with a moderate level of financial leverage observed. However, the company's increasing debt-to-equity and financial leverage ratios suggest a rising financial risk that may warrant close monitoring in future periods.
Coverage ratios
| Jan 31, 2024 | Oct 31, 2023 | Jul 31, 2023 | Apr 30, 2023 | Jan 31, 2023 | Oct 31, 2022 | Jul 31, 2022 | Apr 30, 2022 | Jan 31, 2022 | Oct 31, 2021 | Jul 31, 2021 | Apr 30, 2021 | Jan 31, 2021 | Oct 31, 2020 | Jul 31, 2020 | Apr 30, 2020 | Jan 31, 2020 | Oct 31, 2019 | Jul 31, 2019 | Apr 30, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 18.43 | 252.29 | 431.00 | 633.27 | 1,411.20 | 6,212.00 | 35.84 | 14.13 | 8.70 | 6.31 | 5.26 | 3.94 | 2.68 | 2.63 | 2.69 | 3.09 | 3.13 | 3.55 | 4.17 | 5.34 |
Interest coverage is a financial ratio that measures a company's ability to pay its interest obligations on outstanding debt. A higher interest coverage ratio indicates a company is more capable of meeting its interest payments.
Looking at the data for Greif Inc provided in the table, we can observe a declining trend in interest coverage ratios over the quarters. In Q1 2024, the interest coverage ratio was 5.76, which is lower compared to the ratios in the previous quarters. This downward trend raises some concerns regarding the company's ability to cover its interest expenses with its operating income.
The interest coverage ratio peaked at 11.60 in Q4 2022, indicating that Greif Inc was generating sufficient operating income to comfortably cover its interest payments at that time. However, since then, the ratio has been decreasing consistently, falling to 5.76 in Q1 2024.
A declining interest coverage ratio can be a warning sign of potential financial distress, as it may indicate that the company is struggling to generate enough earnings to cover its interest costs. Investors and creditors typically prefer to see a higher interest coverage ratio to ensure the company is not at risk of defaulting on its debt obligations.
Greif Inc should closely monitor its interest coverage ratio and take necessary steps to improve its operating performance to ensure it can meet its interest obligations in the future.