Hormel Foods Corporation (HRL)

Solvency ratios

	Oct 27, 2024	Oct 29, 2023	Oct 30, 2022	Oct 31, 2021	Oct 25, 2020
Debt-to-assets ratio	0.21	0.18	0.25	0.26	0.11
Debt-to-capital ratio	0.26	0.23	0.30	0.32	0.14
Debt-to-equity ratio	0.36	0.30	0.44	0.48	0.16
Financial leverage ratio	1.68	1.74	1.77	1.82	1.54

Hormel Foods Corporation's solvency ratios reflect its ability to meet its long-term financial obligations and assess the extent of its leverage. The trend in the debt-to-assets ratio has been relatively stable over the last five years, ranging from 0.11 to 0.26, indicating that the company has maintained a relatively low level of debt compared to its total assets.

Similarly, the debt-to-capital and debt-to-equity ratios show a consistent pattern of moderate leverage, with the ratios fluctuating within a range over the past five years. The debt-to-capital ratio has varied between 0.14 and 0.32, while the debt-to-equity ratio has ranged from 0.16 to 0.48. These ratios suggest that Hormel Foods has been able to balance its debt levels in relation to its capital and equity positions.

The financial leverage ratio, which provides an overall measure of the company's debt levels in relation to its assets, has also exhibited stability around the 1.5 to 1.8 range over the last five years. This implies that Hormel Foods has maintained a relatively conservative capital structure with a reasonable level of financial leverage.

Overall, based on the solvency ratios analyzed, Hormel Foods Corporation shows a consistent and balanced approach to managing its long-term financial obligations, maintaining moderate levels of debt relative to its assets, capital, and equity.

Coverage ratios

	Oct 27, 2024	Oct 29, 2023	Oct 30, 2022	Oct 31, 2021	Oct 25, 2020
Interest coverage	13.20	14.82	21.44	27.00	53.90

The interest coverage ratio for Hormel Foods Corporation has shown a declining trend over the past five years, indicating a decreasing ability to cover interest expense with operating income. Despite this decline, the ratio remains above 1, indicating that the company is able to meet its interest obligations. The drop in the ratio from 53.90 in 2020 to 13.20 in 2024 may raise some concerns about the company's ability to generate sufficient earnings to cover interest payments. It is important for investors and stakeholders to closely monitor this trend to assess the company's financial health and ability to service its debt obligations.