HNI Corp (HNI)

The solvency ratios of HNI Corp provide insights into the company's ability to meet its long-term financial obligations.

The Debt-to-assets ratio remained relatively stable from 2020 to 2022 at around 0.12 to 0.13, indicating that the company has a low level of debt compared to its total assets. However, there was a significant increase in 2023 to 0.22 before improving slightly in 2024 to 0.16, reflecting a higher proportion of debt relative to assets in those years.

The Debt-to-capital ratio also followed a similar trend, staying constant at 0.23 from 2020 to 2022 but then increased sharply in 2023 to 0.36 before decreasing to 0.26 in 2024. This ratio measures the proportion of debt in the company's capital structure compared to total capital.

The Debt-to-equity ratio was consistent at 0.30 from 2020 to 2022 before spiking to 0.56 in 2023 and then decreasing to 0.35 in 2024. This ratio highlights the company's financial leverage and shows how much debt is being used to finance its operations compared to equity.

The Financial leverage ratio fluctuated between 2.23 and 2.54 from 2020 to 2024, with the highest point being in 2021. This ratio indicates how much debt the company has relative to its equity and reflects the risks associated with the level of leverage.

Overall, the solvency ratios suggest that HNI Corp maintained a relatively conservative capital structure with low debt levels in comparison to its assets and equity, although there were fluctuations in certain years that may indicate changes in the company's financial risk profile.

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Coverage ratios

The interest coverage ratio for HNI Corp has shown varying levels over the past five years.

- As of December 31, 2020, the interest coverage ratio stood at 8.78, indicating that the company generated operating income nearly 8.78 times greater than its interest expenses.
- By December 31, 2021, the interest coverage ratio improved to 11.95, suggesting that the company's ability to cover its interest obligations further strengthened during that period.
- The trend continued to improve significantly by December 31, 2022, with the interest coverage ratio reaching 17.64, signaling a robust ability to meet interest payments with operating earnings.
- However, there was a notable decline in the interest coverage ratio by December 31, 2023, dropping to 3.54. This decrease may indicate a temporary strain on the company's ability to cover interest expenses with its operating income.
- The ratio then rebounded by December 31, 2024, to 7.59, albeit not reaching the highs of the previous year.

Overall, the interest coverage ratio of HNI Corp has shown fluctuations, with periods of strength and moments of potential financial pressure. It is essential for stakeholders to monitor this ratio closely to assess the company's ability to manage its interest obligations effectively.