Harley-Davidson Inc (HOG)

Solvency ratios provide insights into a company's ability to meet its long-term obligations and indicate the extent to which a company relies on debt financing. Looking at Harley-Davidson, Inc.'s solvency ratios over the past five years, we observe the following trends:

1. Debt-to-assets ratio: This ratio measures the proportion of a company's assets financed by debt. Harley-Davidson's debt-to-assets ratio has decreased from 0.71 in 2019 to 0.59 in 2023. This suggests that the company has reduced its reliance on debt financing to fund its assets, which is a positive indication of improved solvency.

2. Debt-to-capital ratio: The debt-to-capital ratio gauges the extent of a company's capital structure that is funded by debt. Harley-Davidson's debt-to-capital ratio has also shown a decreasing trend from 0.80 in 2019 to 0.69 in 2023. This implies a shift towards a more balanced capital structure with a lower dependence on debt, enhancing the company's solvency position.

3. Debt-to-equity ratio: This ratio reflects the proportion of a company's financing that comes from debt compared to equity. Harley-Davidson's debt-to-equity ratio has decreased significantly from 4.13 in 2019 to 2.19 in 2023. The declining trend indicates a reduction in financial risk and improved solvency, as the company relies less on debt and has increased equity financing.

4. Financial leverage ratio: The financial leverage ratio measures the company's total assets relative to equity. Harley-Davidson's financial leverage ratio has decreased steadily from 5.84 in 2019 to 3.73 in 2023. A declining trend in this ratio indicates a stronger equity position and reduced financial risk, highlighting an enhanced solvency position over the years.

In summary, based on the solvency ratios analysis for Harley-Davidson, Inc., the company has improved its solvency position over the years by reducing its reliance on debt financing, enhancing its equity base, and maintaining a more balanced capital structure. These trends suggest a positive outlook for the company's ability to meet its long-term obligations and withstand financial challenges.

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Coverage ratios

Harley-Davidson, Inc.'s interest coverage ratio has exhibited fluctuations over the past five years. The interest coverage ratio measures a company's ability to meet interest payments on its outstanding debt. A higher interest coverage ratio indicates a stronger ability to cover interest expenses.

Dec 31, 2023: The interest coverage ratio was notably high at 25.31, indicating a robust ability to cover interest payments. This could suggest a healthy financial position and sufficient earnings to meet debt obligations.

Dec 31, 2022: The interest coverage ratio remained strong at 29.09, indicating an even better ability to cover interest expenses compared to the previous year.

Dec 31, 2021: The interest coverage ratio was 26.70, maintaining a solid performance in meeting interest obligations.

Dec 31, 2020: The interest coverage ratio was considerably lower at 4.49, which might raise concerns about the company's ability to cover interest expenses with its earnings.

Dec 31, 2019: The interest coverage ratio rebounded to 18.92, showing an improvement compared to the previous year but still lower than the ratios in 2021, 2022, and 2023.

Overall, the trend in Harley-Davidson, Inc.'s interest coverage ratio indicates fluctuation but generally reflects a strong ability to cover interest payments, with the company experiencing periods of both robust and weaker performance. Investors and stakeholders may want to monitor the company's future interest coverage ratios to assess its financial health and debt repayment capability.