Kraft Heinz Co (KHC)
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 | 1.79 | 1.82 | 1.86 | 1.89 | 1.99 |
Based on the provided data, Kraft Heinz Co's solvency ratios indicate a very strong financial position in terms of debt management and leverage:
1. Debt-to-assets ratio: Kraft Heinz Co has consistently maintained a debt-to-assets ratio of 0.00 over the years, indicating that the company has no debt relative to its total assets. This implies a low risk of insolvency and strong financial stability.
2. Debt-to-capital ratio: Similar to the debt-to-assets ratio, the debt-to-capital ratio also remains at 0.00 throughout the period. This indicates that the company's total debt is not significant relative to its total capital, reflecting a conservative approach to leveraging the business.
3. Debt-to-equity ratio: Kraft Heinz Co's debt-to-equity ratio is consistently at 0.00 across the years. This signifies that the company's debt levels are negligible compared to its equity, suggesting a strong financial position and minimal financial risk.
4. Financial leverage ratio: The financial leverage ratio has decreased from 1.99 in 2020 to 1.79 in 2024. A decreasing trend in this ratio indicates that the company is relying less on debt to finance its operations and is becoming more reliant on equity, which can be seen as a positive sign of financial health.
Overall, based on the solvency ratios provided, Kraft Heinz Co appears to have a very low level of debt relative to its assets, capital, and equity. The decreasing trend in the financial leverage ratio further reinforces the company's prudent debt management practices, indicating a strong solvency position and financial stability.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 1.94 | 4.99 | 4.21 | 1.83 | 1.74 |
The interest coverage ratio measures the ability of a company to meet its interest payments on outstanding debt. Looking at the data for Kraft Heinz Co from 2020 to 2024, we observe fluctuations in the interest coverage ratio. In 2020, the ratio was 1.74, indicating that the company's operating income was just sufficient to cover its interest expenses. This suggests a relatively tight financial position in terms of servicing debt.
However, there was a slight improvement in 2021, with the interest coverage ratio increasing to 1.83. The company's ability to cover interest expenses improved marginally, but it still remained at a level where there is limited room for financial flexibility.
The trend changed notably in 2022 and 2023, with the interest coverage ratio rising to 4.21 and 4.99, respectively. These significant increases indicate a much stronger ability to cover interest payments, reflecting improved financial performance and less financial risk associated with debt obligations. It shows that the company's operating income has improved substantially, providing a comfortable cushion to service its interest obligations.
However, there was a slight decline in 2024, with the interest coverage ratio decreasing to 1.94. This reduction suggests that the company's ability to cover interest expenses weakened compared to the previous year. It would be important to assess the reasons behind this decline and monitor whether it is a temporary fluctuation or a concerning trend in the company's financial health.
Overall, the analysis of Kraft Heinz Co's interest coverage indicates a mix of financial performance over the years, with notable improvements in 2022 and 2023, but a slight setback in 2024. Monitoring this ratio going forward will be crucial to understanding the company's ability to manage its debt obligations effectively.