Corning Incorporated (GLW)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.25 | 0.21 | 0.28 | 0.31 | 0.00 |
| Debt-to-capital ratio | 0.38 | 0.34 | 0.40 | 0.41 | 0.00 |
| Debt-to-equity ratio | 0.61 | 0.51 | 0.67 | 0.71 | 0.00 |
| Financial leverage ratio | 2.47 | 2.46 | 2.44 | 2.32 | 2.24 |
The solvency ratios of Corning, Inc. indicate the company's ability to meet its long-term financial obligations and its overall financial leverage position.
1. Debt-to-assets ratio: This ratio shows the proportion of the company's total assets funded by debt. Corning's debt-to-assets ratio has been relatively stable over the past five years, ranging from 0.23 to 0.27. The decreasing trend from 2020 to 2022, followed by a slight increase in 2023, suggests that the company has been effectively managing its debt levels in relation to its assets.
2. Debt-to-capital ratio: This ratio measures the proportion of a company's capital structure that is financed by debt. Corning's debt-to-capital ratio has also shown consistency over the years, hovering between 0.36 and 0.39. The company's debt levels have remained relatively constant compared to its total capital, indicating a balanced mix of debt and equity financing.
3. Debt-to-equity ratio: The debt-to-equity ratio reflects the extent to which a company is leveraged through debt. Corning's debt-to-equity ratio has exhibited an increasing trend from 0.57 in 2021 to 0.65 in 2023. This signifies that the company is relying more on debt financing relative to equity, which could potentially pose higher financial risk.
4. Financial leverage ratio: This ratio provides an indication of how much debt a company uses to finance its assets. Corning's financial leverage ratio has shown an upward trend over the years, increasing from 2.24 in 2019 to 2.47 in 2023. The rising trend suggests that the company is increasingly using debt to support its operations and investments, which could lead to higher financial leverage and associated risks.
Overall, while Corning, Inc. has maintained stable debt levels in proportion to its assets and capital, the increasing debt-to-equity and financial leverage ratios indicate a growing reliance on debt financing. It will be important for the company to carefully manage its debt levels to ensure sustainable and healthy solvency in the long term.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 22.25 | 29.96 | 48.00 | 7.83 | 24.19 |
Interest coverage is a financial ratio that measures a company's ability to meet its interest obligations with its operating income. A higher interest coverage ratio indicates that the company is more capable of servicing its debt. Looking at Corning, Inc.'s interest coverage ratio over the past five years, we observe fluctuations in the ratio.
In 2023, the interest coverage ratio was 3.06, which indicates that the company generated operating income that was 3.06 times its interest expense for the year. This ratio was lower compared to the previous year (5.19 in 2022) and was a downward trend from the 7.43 reported in 2021. The significant drop in the interest coverage ratio in 2023 may raise concerns about the company's ability to comfortably cover its interest payments using its operating income alone.
It is important to note that a lower interest coverage ratio, such as the one seen in 2020 at 1.85, suggests a higher risk for creditors as the company may struggle to meet its interest obligations. On the other hand, higher ratios, like the 6.62 reported in 2019, demonstrate a stronger ability to service debt.
Overall, the trend in Corning, Inc.'s interest coverage ratio over the past five years indicates some variability in the company's ability to cover its interest expenses with operating income. Analysts and stakeholders may want to further investigate the reasons behind the fluctuations in the interest coverage ratio to assess the company's financial health and debt repayment capabilities.