Hillenbrand Inc (HI)

The solvency ratios of Hillenbrand Inc over the past five years indicate the company's ability to meet its long-term financial obligations and manage its debt levels effectively.

1. Debt-to-assets ratio:
- The debt-to-assets ratio has remained relatively stable at around 0.30 to 0.38, indicating that, on average, 30% to 38% of the company's assets are financed by debt.
- A higher debt-to-assets ratio suggests a higher dependency on debt financing for asset acquisition.

2. Debt-to-capital ratio:
- The debt-to-capital ratio has also shown consistency, hovering between 0.50 and 0.59 over the five-year period.
- This ratio demonstrates the proportion of capital that is funded by debt, with higher ratios indicating a larger portion of capital being debt-financed.

3. Debt-to-equity ratio:
- The debt-to-equity ratio has fluctuated between 1.00 and 1.43, reflecting the amount of debt relative to shareholders' equity.
- A higher debt-to-equity ratio indicates higher financial leverage and a larger reliance on debt to finance operations.

4. Financial leverage ratio:
- The financial leverage ratio has seen variations between 3.32 and 3.77, measuring the company's total assets in relation to its equity.
- A higher financial leverage ratio indicates more debt financing compared to equity financing, which can amplify returns but also increase financial risk.

Overall, the analysis of Hillenbrand Inc's solvency ratios suggests a consistent reliance on debt financing over the past five years, with moderate fluctuations in the ratios. The company has maintained a balance between debt and equity financing, although a closer examination may be necessary to assess the impact of debt levels on the firm's financial health and risk profile.

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Coverage ratios

The interest coverage ratio for Hillenbrand Inc has shown fluctuations over the past five years. In 2024, the interest coverage ratio was negative at -0.20, indicating that the company's operating income was insufficient to cover its interest expenses. This may raise concerns about the company's ability to meet its debt obligations using its current earnings.

In 2023, the interest coverage ratio improved significantly to 9.66, suggesting that the company's operating income was more than sufficient to cover its interest expenses. This indicates a strong ability to meet its interest payments comfortably.

The interest coverage ratio remained relatively stable in 2022 and 2021 at 5.56 and 5.42, respectively, indicating consistent coverage of interest expenses with operating income.

In 2020, the interest coverage ratio was low at 0.67, signaling a potential challenge in meeting interest obligations with operating income.

Overall, fluctuations in the interest coverage ratio for Hillenbrand Inc over the five-year period suggest varying levels of financial risk and operational efficiency in meeting interest payments. It is essential for stakeholders to monitor this ratio to assess the company's ability to service its debt and manage financial obligations effectively.