Keurig Dr Pepper Inc (KDP)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.19 | 0.21 | 0.23 | 0.22 | 0.26 |
| Debt-to-capital ratio | 0.28 | 0.31 | 0.32 | 0.32 | 0.36 |
| Debt-to-equity ratio | 0.39 | 0.44 | 0.46 | 0.47 | 0.55 |
| Financial leverage ratio | 2.03 | 2.06 | 2.03 | 2.09 | 2.13 |
Keurig Dr Pepper Inc's solvency ratios indicate the company's ability to meet its long-term financial obligations. The debt-to-assets ratio has been relatively stable over the past five years, ranging from 0.24 to 0.30. This suggests that, on average, 24% to 30% of the company's assets are financed by debt.
Similarly, the debt-to-capital ratio has also exhibited consistency, hovering around 0.34 to 0.39. This ratio indicates the proportion of the company's capital structure that is funded by debt, averaging between 34% and 39%. The debt-to-equity ratio has shown a declining trend, decreasing from 0.63 in 2019 to 0.54 in 2023. This implies that the company is relying less on debt financing compared to equity financing over time.
The financial leverage ratio, which measures the company's total assets relative to its equity, has shown a slight decrease over the past five years from 2.13 in 2019 to 2.03 in 2023. This suggests that the company's assets are funded by equity to a greater extent than debt.
Overall, Keurig Dr Pepper Inc's solvency ratios demonstrate a stable and improving financial position in terms of managing its debt obligations and capital structure. The decreasing trend in debt-to-equity ratio and financial leverage ratio, along with consistent debt-to-assets and debt-to-capital ratios, indicate a healthy balance between debt and equity financing.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 6.56 | 3.48 | 6.60 | 3.90 | 3.59 |
Interest coverage ratio is a key financial metric that indicates a company's ability to meet its interest obligations using its operating income. The trend analysis of Keurig Dr Pepper Inc's interest coverage ratio over the past five years shows an improving trend, reflecting the company's enhanced ability to cover its interest expenses.
The interest coverage ratio for Keurig Dr Pepper Inc has increased steadily from 3.64 in 2019 to 6.44 in 2023. This indicates that the company's operating income is more than six times its interest expenses in 2023, providing a comfortable cushion to cover its debt servicing obligations.
The consistent improvement in the interest coverage ratio suggests that Keurig Dr Pepper Inc's financial health has strengthened over the years, reducing its financial risk and enhancing its ability to service its debt obligations. This trend is positive for investors and creditors as it indicates the company's improved financial stability and potentially lower default risk.
Overall, the increasing trend in Keurig Dr Pepper Inc's interest coverage ratio reflects a favorable financial performance and demonstrates the company's ability to manage its debt effectively.