Gates Industrial Corporation plc (GTES)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.33 | 0.34 | 0.34 | 0.36 | 0.39 |
| Debt-to-capital ratio | 0.43 | 0.44 | 0.45 | 0.49 | 0.52 |
| Debt-to-equity ratio | 0.75 | 0.78 | 0.82 | 0.95 | 1.10 |
| Financial leverage ratio | 2.25 | 2.31 | 2.43 | 2.65 | 2.80 |
Gates Industrial Corporation plc's solvency ratios indicate the company's ability to meet its long-term financial obligations. The decreasing trend in the debt-to-assets ratio from 0.39 in 2019 to 0.33 in 2023 suggests an improvement in the company's ability to cover its liabilities with its assets.
Similarly, the declining trend in the debt-to-capital ratio from 0.52 in 2019 to 0.43 in 2023 indicates a reduction in the proportion of debt used to finance the company's operations compared to its overall capital structure.
The debt-to-equity ratio shows a decreasing trend from 1.10 in 2019 to 0.75 in 2023, indicating a lower reliance on debt financing compared to equity over the years. This suggests that the company's financial health has improved, as lower debt levels relative to equity can signify a lower risk of financial distress.
The financial leverage ratio, which measures the company's total debt relative to equity, also shows a decreasing trend from 2.80 in 2019 to 2.25 in 2023. This reduction indicates that Gates Industrial Corporation plc has been able to reduce its leverage and reliance on debt financing over time.
Overall, the declining solvency ratios over the years reflect a positive trend in Gates Industrial Corporation plc's financial stability and ability to meet its long-term financial obligations.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 2.60 | 2.69 | 3.36 | 1.39 | 2.23 |
The interest coverage ratio for Gates Industrial Corporation plc has shown fluctuating trends over the past five years. In 2023, the interest coverage ratio decreased to 2.60 from 2.69 in 2022, indicating a slight decline in the company's ability to cover its interest expenses with its operating income. However, despite this decrease, the ratio remains above the threshold of 1, suggesting that the company is still generating sufficient earnings to meet its interest payments.
Comparing to the previous years, in 2021, Gates Industrial Corporation plc had a relatively higher interest coverage ratio of 3.36, reflecting a stronger ability to handle its interest obligations. Conversely, in 2020, the interest coverage ratio dropped to 1.39, signaling a potential strain on the company's ability to cover its interest expenses with its operating income.
Overall, the trend in Gates Industrial Corporation plc's interest coverage ratio indicates some fluctuations in the company's ability to meet its interest obligations over the years, with 2021 standing out as a particularly strong year in terms of interest coverage. It is important for stakeholders to closely monitor this ratio to assess the company's financial risk and debt servicing capacity.