Hanesbrands Inc (HBI)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.57 | 0.56 | 0.47 | 0.48 | 0.44 |
| Debt-to-capital ratio | 0.89 | 0.90 | 0.83 | 0.82 | 0.72 |
| Debt-to-equity ratio | 7.72 | 9.07 | 4.73 | 4.59 | 2.63 |
| Financial leverage ratio | 13.45 | 16.33 | 10.07 | 9.48 | 5.95 |
The solvency ratios of Hanesbrands Inc over the five-year period show a mixed trend. The Debt-to-assets ratio has increased slightly from 0.44 in 2019 to 0.57 in 2023, indicating that the company's reliance on debt to finance its assets has marginally increased. The Debt-to-capital and Debt-to-equity ratios also exhibit an upward trend, with the former rising from 0.72 in 2019 to 0.89 in 2023, and the latter increasing from 2.63 in 2019 to 7.72 in 2023. These ratios suggest a higher proportion of debt in relation to both total capital and equity, indicating a higher level of financial risk for the company.
The Financial leverage ratio, which shows the company's total assets in relation to shareholders' equity, has been fluctuating over the years. It increased from 5.95 in 2019 to 13.45 in 2023, indicating a significant rise in the level of total assets relative to equity. This may signify increased financial leverage and risk for the company.
Overall, while the company's solvency ratios have shown some fluctuations, there is a general upward trend in the level of leverage and debt usage, which could potentially raise concerns regarding the company's ability to meet its financial obligations in the long term. Investors and stakeholders may closely monitor these ratios to assess the company's financial health and solvency position.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 1.05 | 71.17 | 64.83 | 3.69 | 79.27 |
The interest coverage ratio for Hanesbrands Inc has fluctuated significantly over the past five years. In 2023, the interest coverage ratio was 1.05, indicating that the company's operating income is only sufficient to cover its interest expense slightly. This suggests a potential strain on the company's ability to meet interest obligations.
The significant drop in interest coverage from 2022, where it was 71.17, to 2023 is concerning and may indicate a deterioration in the company's financial health or increased financial leverage. However, it is important to note that a single data point may not necessarily represent a sustainable trend.
Looking at the trend over the five-year period, the interest coverage ratio has shown fluctuations, with relatively strong ratios in 2022 and 2019. These years indicate that the company had significant operating income relative to its interest expenses.
Overall, the recent decline in interest coverage for Hanesbrands Inc warrants further investigation into the company's financial management, debt levels, and operating performance to assess the potential risks and implications for investors and creditors.