Kraft Heinz Co (KHC)
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 | 0.00 |
| 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 | 1.82 | 1.86 | 1.89 | 1.99 | 1.97 |
The solvency ratios for Kraft Heinz Co indicate a consistent and stable financial position over the past five years. The debt-to-assets, debt-to-capital, and debt-to-equity ratios all show a consistent trend of 0.00, indicating that the company has not used debt to finance its assets, capital, or equity during this period. This suggests that Kraft Heinz Co has been able to fund its operations and investments primarily through equity or internally generated funds rather than through borrowing.
However, the financial leverage ratio has shown a slight decrease from 1.97 in 2019 to 1.82 in 2023. This ratio indicates the extent to which the company relies on debt financing, with a lower ratio typically considered more favorable as it implies lower financial risk. The decreasing trend in the financial leverage ratio for Kraft Heinz Co suggests that the company has reduced its reliance on debt over the past five years, which could indicate a stronger financial position and lower risk of financial distress.
Overall, based on the solvency ratios analyzed, Kraft Heinz Co appears to have maintained a most conservative approach to financing its operations, as indicated by the consistently low debt ratios and the decreasing trend in the financial leverage ratio.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 4.99 | 4.21 | 1.83 | 1.74 | 2.96 |
The interest coverage ratio measures a company's ability to meet its interest payment obligations from its operating income. A higher interest coverage ratio indicates a stronger ability to cover interest expenses.
Analyzing Kraft Heinz Co's interest coverage over the past five years reveals a fluctuating trend. In 2023, the interest coverage ratio improved to 4.99 from 4.21 in 2022, indicating that the company generated nearly five times the operating income to cover its interest payments. This suggests an improvement in the company's financial position compared to the previous year.
However, looking back to 2021 and 2020, the interest coverage ratios were lower at 1.83 and 1.74, respectively, indicating a weaker ability to cover interest expenses with operating income during those years. This could raise concerns about the company's financial health and its ability to meet interest payments.
In 2019, the interest coverage ratio was 2.96, showing a moderate ability to cover interest expenses.
Overall, the varying interest coverage ratios of Kraft Heinz Co over the past five years suggest fluctuations in the company's financial performance and ability to service its debt obligations using its operating income. It is important for investors and stakeholders to monitor these ratios to assess the company's financial stability and risk levels.