International Flavors & Fragrances Inc (IFF)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.30 | 0.29 | 0.27 | 0.28 | 0.30 |
| Debt-to-capital ratio | 0.39 | 0.37 | 0.34 | 0.37 | 0.39 |
| Debt-to-equity ratio | 0.63 | 0.59 | 0.51 | 0.60 | 0.64 |
| Financial leverage ratio | 2.12 | 2.01 | 1.88 | 2.15 | 2.14 |
The solvency ratios of International Flavors & Fragrances Inc. indicate the company's ability to meet its long-term financial obligations and the proportion of debt in its capital structure.
1. Debt-to-assets ratio: This ratio measures the proportion of total assets financed by debt. The trend shows a slight increase from 0.29 in 2021 to 0.33 in 2023, indicating a higher reliance on debt to finance assets.
2. Debt-to-capital ratio: This ratio assesses the extent to which debt is used to fund the company's operations. The ratio has also seen a slight increase from 0.35 in 2021 to 0.41 in 2023, suggesting a higher reliance on debt in the company's capital structure.
3. Debt-to-equity ratio: This ratio indicates the proportion of debt and equity in the company's financing. The ratio increased from 0.54 in 2021 to 0.69 in 2023, showing a higher level of debt relative to equity financing over the period.
4. Financial leverage ratio: This ratio measures the company's use of debt to finance its assets. The ratio has fluctuated slightly over the years but remains relatively stable, ranging from 1.88 in 2021 to 2.12 in 2023, signifying a moderate level of financial leverage.
Overall, the trend in the solvency ratios of International Flavors & Fragrances Inc. indicates a moderate increase in the company's reliance on debt financing over the years, which could potentially increase financial risk and interest burden. Investors and stakeholders may need to monitor these ratios closely to assess the company's ability to meet its financial obligations in the long term.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | -5.55 | -3.95 | 2.02 | 4.29 | 4.82 |
The interest coverage ratio of International Flavors & Fragrances Inc. has shown a declining trend over the past five years. In 2019, the interest coverage ratio was the highest at 5.05, indicating that the company's operating income was more than five times its interest expenses. However, this ratio has steadily decreased to 4.46 in 2020, 2.16 in 2021, 3.13 in 2022, and 1.54 in 2023.
A declining interest coverage ratio suggests that the company may be facing challenges in generating enough operating income to cover its interest expenses. A ratio below 2 generally indicates that the company may have difficulty meeting its interest obligations from its operating income alone.
It is important for International Flavors & Fragrances Inc. to closely monitor its interest coverage ratio and take necessary steps to improve it, such as increasing operating income, reducing interest expenses, or a combination of both, to ensure its long-term financial stability and ability to meet its debt obligations.