Hubbell Inc (HUBB)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.22 | 0.29 | 0.27 | 0.27 | 0.28 |
| Debt-to-capital ratio | 0.31 | 0.41 | 0.38 | 0.39 | 0.41 |
| Debt-to-equity ratio | 0.44 | 0.70 | 0.61 | 0.64 | 0.69 |
| Financial leverage ratio | 2.04 | 2.40 | 2.29 | 2.37 | 2.46 |
Hubbell Inc's solvency ratios reflect a consistent and relatively healthy financial position over the past five years.
1. The Debt-to-assets ratio remained stable between 0.27 and 0.29, indicating that around 27% to 29% of the company's assets were financed by debt during this period.
2. The Debt-to-capital ratio showed a decreasing trend from 0.41 in 2020 to 0.31 in 2024, suggesting a decline in the proportion of debt in the company's capital structure.
3. The Debt-to-equity ratio exhibited a similar decreasing pattern from 0.69 in 2020 to 0.44 in 2024, indicating a reduction in the level of debt relative to equity over the years.
4. The Financial leverage ratio also decreased consistently from 2.46 in 2020 to 2.04 in 2024, signifying a decline in the company's reliance on debt to finance its operations, assets, and growth.
Overall, Hubbell Inc's solvency ratios demonstrate a prudent management of debt levels and a strengthening financial position over the analyzed period.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 14.79 | 28.30 | 14.30 | 9.73 | 8.31 |
The interest coverage ratio for Hubbell Inc has shown a positive trend over the years, indicating the company's ability to meet its interest obligations from its operating income. In December 2020, the interest coverage was 8.31, which improved to 9.73 in December 2021. This improvement continued significantly in the following years, with the ratio reaching 14.30 in December 2022, 28.30 in December 2023, and 14.79 in December 2024.
The increasing trend in the interest coverage ratio suggests that Hubbell Inc's earnings are more than sufficient to cover its interest expenses, reflecting a strong financial position and reduced risk of default on its debt obligations. This trend is favorable for investors and creditors as it indicates the company's ability to comfortably service its debt in the future.