Hormel Foods Corporation (HRL)
Solvency ratios
| Jan 31, 2025 | Oct 31, 2024 | Oct 27, 2024 | Jul 31, 2024 | Jul 28, 2024 | Apr 30, 2024 | Apr 28, 2024 | Jan 31, 2024 | Jan 28, 2024 | Oct 31, 2023 | Oct 29, 2023 | Jul 31, 2023 | Jul 30, 2023 | Apr 30, 2023 | Jan 31, 2023 | Jan 29, 2023 | Oct 31, 2022 | Oct 30, 2022 | Jul 31, 2022 | May 1, 2022 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.21 | 0.00 | 0.22 | 0.00 | 0.20 | 0.00 | 0.17 | 0.00 | 0.18 | 0.00 | 0.18 | 0.00 | 0.00 | 0.25 | 0.00 | 0.25 | 0.00 | 0.25 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.26 | 0.00 | 0.27 | 0.00 | 0.27 | 0.00 | 0.23 | 0.00 | 0.23 | 0.00 | 0.23 | 0.00 | 0.00 | 0.30 | 0.00 | 0.30 | 0.00 | 0.31 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.36 | 0.00 | 0.36 | 0.00 | 0.36 | 0.00 | 0.30 | 0.00 | 0.30 | 0.00 | 0.31 | 0.00 | 0.00 | 0.43 | 0.00 | 0.44 | 0.00 | 0.45 |
| Financial leverage ratio | 1.67 | 1.68 | 1.68 | 1.67 | 1.67 | 1.79 | 1.79 | 1.72 | 1.72 | 1.74 | 1.74 | 1.74 | 1.74 | 1.73 | 1.74 | 1.74 | 1.77 | 1.77 | 1.78 | 1.79 |
Hormel Foods Corporation's solvency ratios indicate the company's ability to meet its long-term financial obligations. The debt-to-assets ratio, which measures the proportion of the company's assets financed by debt, fluctuated over the periods provided, ranging from 0.00 to 0.25. Generally, a lower debt-to-assets ratio indicates lower financial risk and greater solvency.
The debt-to-capital ratio, which shows the percentage of the company's capital that is financed by debt, also varied between 0.00 and 0.31. A decreasing trend in this ratio suggests reduced reliance on debt financing for capital structure, potentially enhancing financial stability.
The debt-to-equity ratio, illustrating the proportion of equity and debt in the company's capital structure, witnessed fluctuations between 0.00 and 0.45. A declining trend in this ratio implies a lower reliance on debt financing relative to equity, which can be favorable for long-term sustainability.
The financial leverage ratio, a broader measure of the company's overall debt level compared to its equity, experienced changes in the range of 1.67 to 1.79. A decreasing trend in this ratio also signals a reduction in financial risk and leverage.
Overall, the solvency ratios of Hormel Foods Corporation indicate a mix of debt and equity financing strategies over the periods analyzed, with varying levels of leverage and financial risk management. Continued monitoring of these ratios can provide insights into the company's long-term financial health and ability to fulfill its obligations.
Coverage ratios
| Jan 31, 2025 | Oct 31, 2024 | Oct 27, 2024 | Jul 31, 2024 | Jul 28, 2024 | Apr 30, 2024 | Apr 28, 2024 | Jan 31, 2024 | Jan 28, 2024 | Oct 31, 2023 | Oct 29, 2023 | Jul 31, 2023 | Jul 30, 2023 | Apr 30, 2023 | Jan 31, 2023 | Jan 29, 2023 | Oct 31, 2022 | Oct 30, 2022 | Jul 31, 2022 | May 1, 2022 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 13.52 | 13.18 | 12.43 | 11.77 | 12.90 | 14.24 | 14.84 | 15.49 | 14.42 | 13.35 | 13.81 | 14.29 | 15.29 | 17.51 | 18.77 | 19.59 | 21.26 | 21.64 | 21.86 | 22.53 |
Hormel Foods Corporation's interest coverage ratio has been declining over the period from May 1, 2022, to January 31, 2025. The interest coverage ratio measures the company's ability to meet its interest payments on outstanding debt.
The interest coverage ratio of Hormel Foods Corporation started at a relatively healthy level of 22.53 on May 1, 2022, indicating that the company's earnings before interest and taxes (EBIT) were more than sufficient to cover its interest expenses. However, the ratio slowly decreased over time, reaching 13.52 on January 31, 2025.
The declining trend in the interest coverage ratio may raise concerns about the company's ability to comfortably meet its interest obligations in the future. It suggests that either the EBIT is decreasing, the interest expenses are increasing, or a combination of both factors is affecting the ratio.
Investors and creditors typically prefer a higher interest coverage ratio as it indicates a lower risk of default. Therefore, monitoring this ratio is important to assess the company's financial stability and its ability to meet its debt obligations. Hormel Foods Corporation may need to carefully manage its debt levels and operational performance to improve its interest coverage ratio in the future.