Howmet Aerospace Inc (HWM)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 2.31 | 2.58 | 2.85 | 2.91 | 3.20 |
Based on the provided data, Howmet Aerospace Inc has maintained a consistently strong solvency position over the past five years. The debt-to-assets ratio, debt-to-capital ratio, and debt-to-equity ratio have all remained at 0.00, indicating that the company has no debt relative to its assets, capital, or equity during this period.
Additionally, the financial leverage ratio has decreased from 3.20 in 2020 to 2.31 in 2024. This decreasing trend suggests that the company has been reducing its reliance on debt to finance its operations and investments over the years.
Overall, the solvency ratios of Howmet Aerospace Inc demonstrate a financially stable and robust position, indicating that the company has a strong ability to meet its financial obligations and sustain its operations without incurring significant debt.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 8.60 | 5.47 | 4.34 | 3.19 | 1.45 |
Interest coverage is a significant financial ratio that indicates a company's ability to meet its interest payment obligations using its operating income. In the case of Howmet Aerospace Inc, the interest coverage ratio has shown an improving trend over the past few years.
As of December 31, 2020, the interest coverage ratio was 1.45, suggesting that the company's operating income was only sufficient to cover its interest expenses 1.45 times. However, there has been a notable improvement in subsequent years. By December 31, 2021, the interest coverage ratio had increased to 3.19, indicating a healthier financial position.
This positive trend continued in the following years, with the interest coverage ratio reaching 4.34 by December 31, 2022, 5.47 by December 31, 2023, and 8.60 by December 31, 2024. These higher ratios demonstrate that Howmet Aerospace Inc's operating income has been increasingly able to cover its interest expenses, signifying improved financial stability and a reduced risk of default on debt payments.
Overall, the rising trend in the interest coverage ratio for Howmet Aerospace Inc reflects strengthened financial health and an enhanced capacity to service debt obligations through operating profits.