Kadant Inc (KAI)
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 | 1.69 | 1.52 | 1.76 | 2.01 | 1.87 |
Based on the provided data for Kadant Inc, the solvency ratios indicate a strong financial position in terms of debt management and leverage:
1. Debt-to-assets ratio: The debt-to-assets ratio for Kadant Inc is consistently reported as 0.00 from December 31, 2020, to December 31, 2024. This indicates that the company has no debt relative to its total assets during these periods, which signifies a low-risk level related to debt obligations and asset coverage.
2. Debt-to-capital ratio: Similarly, the debt-to-capital ratio remains at 0.00 across the same years, suggesting that the company's debt levels relative to its total capital (debt plus equity) are minimal. This ratio further supports the notion of a strong solvency position and financial stability.
3. Debt-to-equity ratio: The debt-to-equity ratio for Kadant Inc is also recorded as 0.00 from December 31, 2020, to December 31, 2024. This ratio indicates that the company has no debt compared to its equity, reflecting that it primarily finances its operations through equity rather than debt.
4. Financial leverage ratio: The financial leverage ratio shows a slight fluctuation over the years, decreasing from 1.87 on December 31, 2020, to 1.52 on December 31, 2023, before slightly increasing to 1.69 on December 31, 2024. Despite the fluctuation, the financial leverage ratio remains relatively stable and indicates that the company's reliance on debt financing is moderate, and it has the ability to sustain its debt obligations.
In summary, the solvency ratios for Kadant Inc demonstrate a conservative approach to managing debt and leverage, with no significant debt obligations relative to assets, capital, or equity. This indicates a healthy financial position and a lower risk of financial distress due to excessive debt levels.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 8.55 | 19.85 | 26.45 | 24.07 | 10.85 |
Interest coverage is a key financial ratio that indicates a company's ability to meet its interest obligations from its operational earnings. Looking at Kadant Inc's interest coverage ratio over the past five years, we observe a fluctuating trend.
In December 2020, the interest coverage ratio stood at 10.85, indicating that the company earned 10.85 times the amount needed to cover its interest payments. This suggests a moderate ability to meet interest obligations.
Over the following years, the interest coverage ratio improved significantly. By December 2021, it reached 24.07 and continued to increase to 26.45 by December 2022, indicating a strengthening ability to cover interest expenses comfortably.
However, there was a slight decrease in the interest coverage ratio in December 2023 to 19.85, although it remained above the industry average. This suggests that the company's earnings were still sufficient to cover interest costs, albeit at a slightly lower level.
By December 2024, the interest coverage ratio dropped to 8.55, falling below the prior years. This decline may raise concerns about the company's ability to cover interest payments from its earnings.
Overall, Kadant Inc's interest coverage ratio has shown variability over the past five years, with notable improvements followed by a slight decline in recent years. It is important for investors and stakeholders to monitor this ratio to assess the company's financial health and ability to manage its debt obligations.