Griffon Corporation (GFF)

The solvency ratios of Griffon Corporation have shown a consistent trend over the five-year period from September 30, 2020, to September 30, 2024.

The debt-to-assets ratio has gradually increased from 0.42 in 2020 to 0.64 in 2024, indicating that a higher proportion of Griffon's assets are financed through debt. This means that Griffon's level of leverage has increased over the years.

Similarly, the debt-to-capital ratio has also shown an upward trend, rising from 0.60 in 2020 to 0.87 in 2024. This indicates that a larger portion of Griffon's capital structure is funded by debt as opposed to equity.

The debt-to-equity ratio has exhibited significant growth, increasing from 1.48 in 2020 to 6.74 in 2024. This substantial increase reflects a higher level of financial risk for the company as it indicates that Griffon is increasingly relying on debt to finance its operations and growth initiatives.

The financial leverage ratio has also shown a continuous upward trajectory, from 3.50 in 2020 to 10.54 in 2024. This ratio highlights the extent to which Griffon is utilizing debt to support its operations, and a higher ratio indicates higher financial risk and leverage for the company.

Overall, the solvency ratios of Griffon Corporation suggest that the company has been taking on more debt relative to its assets, capital, and equity over the past five years. This indicates an increasing level of financial leverage and risk for the company, which could impact its financial stability and ability to meet its debt obligations in the long term.

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Coverage ratios

Griffon Corporation's interest coverage ratio has shown inconsistent performance over the past five years. In 2024, the interest coverage ratio improved to 3.83, indicating that the company's ability to meet its interest obligations is strong with its earnings being 3.83 times higher than its interest expenses.

However, in 2023 and 2022, the interest coverage ratios were 2.11 and -1.07 respectively. A ratio below 1, as seen in 2022, suggests that the company's earnings were not sufficient to cover its interest expenses, indicating financial distress. The negative ratio in 2022 implies that Griffon Corporation's earnings were not enough to cover its interest payments.

In 2021 and 2020, the interest coverage ratios were 2.88 and 2.19 respectively, showing moderate performance where the company was able to cover its interest payments comfortably.

Overall, Griffon Corporation's interest coverage ratio has been volatile, with improvements in recent years. It is essential for the company to maintain a healthy interest coverage ratio to ensure its ability to meet interest obligations and avoid financial distress. Further analysis of the company's financial performance and strategy would be necessary to understand the factors driving these fluctuations in the interest coverage ratio.