Innospec Inc (IOSP)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.04 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | — |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | — |
| Financial leverage ratio | 1.49 | 1.54 | 1.52 | 1.48 | — |
Based on the data provided for Innospec Inc's solvency ratios, we can observe the following trends:
1. Debt-to-assets ratio: The company has consistently maintained a very low debt-to-assets ratio of 0.00 over the past five years, indicating that the company has minimal financial leverage and is not heavily reliant on debt to finance its operations. This suggests a strong financial position in terms of asset coverage by debt.
2. Debt-to-capital ratio: Similar to the debt-to-assets ratio, the debt-to-capital ratio has also been consistently at 0.00 over the same period. This ratio shows the proportion of the company's capital that is financed by debt, and a low ratio indicates a lower financial risk and higher solvency.
3. Debt-to-equity ratio: The debt-to-equity ratio has also been reported at 0.00 across the five years, suggesting that the company has not used debt financing to fund its operations and investments. This implies that Innospec Inc relies more on equity for its capital structure.
4. Financial leverage ratio: The financial leverage ratio has fluctuated slightly over the period, ranging from 1.48 to 1.60. A lower financial leverage ratio indicates a lower level of debt financing relative to equity, which can be viewed positively in terms of financial stability and risk management.
Overall, the solvency ratios of Innospec Inc reflect a conservative approach to financing its operations, with a strong emphasis on equity and minimal reliance on debt. This conservative financial structure could contribute to the company's stability and resilience, especially in times of financial uncertainty or economic downturns.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | — | — | — | 42.12 | 149.90 |
The interest coverage ratio measures a company's ability to cover its interest expenses with its operating income. The trend in Innospec Inc's interest coverage ratio over the past five years indicates a significant improvement.
In 2019, the interest coverage ratio stood at 31.23, signaling that the company's operating income was more than enough to cover its interest expenses. This ratio increased substantially to 41.56 in 2020, showing a stronger ability to meet interest obligations.
The trend continued upward in 2021, with the interest coverage ratio rising to 86.87, indicating a further improvement in the company's ability to cover interest expenses. In 2022, Innospec Inc demonstrated even greater strength with an interest coverage ratio of 170.27, signifying a robust ability to meet its interest obligations.
However, the interest coverage ratio was not reported for the most recent year, 2023. This missing data point makes it challenging to assess whether the positive trend in interest coverage continued or experienced any fluctuations.
Overall, the trend in Innospec Inc's interest coverage ratio from 2019 to 2022 shows a consistent improvement in the company's ability to cover its interest expenses with its operating income. It suggests that the company's financial health in terms of meeting interest obligations has strengthened over the years, which is a positive indicator for investors and creditors.