Inter Parfums Inc (IPAR)

Interpreting the solvency ratios of Inter Parfums Inc, we observe the following trends:

1. Debt-to-assets ratio: This ratio measures the proportion of the company's assets financed by debt. From March 31, 2020, to December 31, 2024, the ratio fluctuated between 0.01 and 0.12, indicating a relatively low level of debt compared to total assets. The ratio remained relatively stable, hovering around 0.10 towards the end of the period, suggesting a conservative approach to debt financing.

2. Debt-to-capital ratio: This ratio reflects the percentage of the company's capital structure that is financed by debt. The ratio varied from 0.02 to 0.20 during the period under review. There was a noticeable increase from June 30, 2021, to December 31, 2022, before declining towards the end of the period. The higher ratios in the middle of the period suggest increased debt in the capital structure, which may have been used for growth or investment.

3. Debt-to-equity ratio: This ratio shows the extent of the company's financing that comes from debt relative to equity. The ratio ranged between 0.02 and 0.25 over the period, with a similar increasing trend observed in the middle years. The lower ratios towards the end of the period indicate a reduced reliance on debt for financing compared to equity, signaling a healthier financial structure.

4. Financial leverage ratio: This ratio reflects the company's level of financial leverage, indicating the proportion of debt in the capital structure. Inter Parfums Inc's leverage ratio fluctuated between 1.62 and 2.12 during the period. The increasing trend up to December 31, 2022, followed by a decrease, suggests fluctuations in debt usage and capital structure optimization over the years.

In conclusion, Inter Parfums Inc maintained a conservative approach to debt financing based on the analyzed solvency ratios. The company's debt levels, although fluctuating, remained relatively moderate compared to its assets, capital, and equity, indicating a balanced and sustainable financial position.

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Coverage ratios

Inter Parfums Inc's interest coverage ratio indicates the company's ability to meet its interest payment obligations with its operating income. The interest coverage ratio has shown varying trends over the reported periods.

The interest coverage ratio was relatively high, starting at 31.35 in March 2020, indicating a strong ability to cover interest expenses. However, this ratio decreased to 20.56 in June 2020 and further declined to 20.20 in September 2020.

There was a significant improvement in the interest coverage ratio, reaching 30.24 in December 2020, indicating better coverage of interest expenses. This positive trend continued into the following periods with ratios of 62.78 in March 2021, 56.78 in June 2021, and 41.93 in September 2021, demonstrating a strong ability to cover interest payments.

The interest coverage ratio remained relatively high in subsequent periods, with ratios of 46.45 in December 2021, 42.30 in March 2022, and 45.99 in June 2022. This indicated favorable coverage of interest expenses during these periods.

In September 2022, the interest coverage ratio significantly increased to 67.73, reflecting a strong ability to cover interest payments with operating income. However, there was a slight decline in the ratio to 46.61 in December 2022.

The interest coverage ratio continued to decrease in the subsequent periods, with ratios of 38.39 in March 2023, 32.46 in June 2023, and 28.12 in September 2023, indicating a reduced ability to cover interest expenses.

The interest coverage ratio further declined to 20.06 in December 2023, 19.36 in March 2024, and hovered around 19-30 range in the following periods, from June 2024 to December 2024.

Overall, the interest coverage ratio of Inter Parfums Inc has shown fluctuations over time, with periods of strong and weak coverage of interest expenses. Investors and creditors may closely monitor this ratio to assess the company's ability to meet its interest obligations in the future.