Graco Inc (GGG)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.03 | 0.03 | 0.08 | 0.10 |
| Debt-to-capital ratio | 0.00 | 0.04 | 0.04 | 0.10 | 0.14 |
| Debt-to-equity ratio | 0.00 | 0.04 | 0.04 | 0.12 | 0.16 |
| Financial leverage ratio | 1.22 | 1.31 | 1.43 | 1.55 | 1.65 |
Graco Inc's solvency ratios demonstrate a strong financial position and the ability to meet its debt obligations. The debt-to-assets ratio has consistently decreased over the past five years, indicating a lower reliance on debt financing to support its assets. Similarly, the debt-to-capital and debt-to-equity ratios have also shown a declining trend, implying that the company has been reducing its debt relative to its capital and equity.
Furthermore, the financial leverage ratio has improved steadily over the years, suggesting that the company has been effectively managing its debt levels in relation to its equity. A decreasing financial leverage ratio is a positive signal as it indicates that the company is becoming less reliant on debt financing to support its operations.
Overall, the solvency ratios of Graco Inc reflect a healthy financial position with a decreasing dependency on debt, which bodes well for the company's ability to weather economic uncertainties and meet its financial obligations.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 118.28 | 58.16 | 50.78 | 34.21 | 31.96 |
The interest coverage ratio for Graco Inc has shown a consistently increasing trend over the past five years, indicating a strong ability to cover its interest expenses with its operating profits. The ratio, calculated as earnings before interest and taxes divided by interest expenses, was 118.28 in 2023, significantly higher than the ratios of 58.16 in 2022, 50.78 in 2021, 34.21 in 2020, and 31.96 in 2019.
This upward trend suggests that Graco Inc's profitability and operating performance have been improving, allowing the company to comfortably meet its interest payment obligations. A higher interest coverage ratio is generally favorable as it indicates a lower risk of financial distress due to an inability to make interest payments. Overall, the consistent increase in Graco Inc's interest coverage ratio reflects a healthy financial position and efficient management of its debt obligations.