Knowles Cor (KN)

Knowles Corp's solvency ratios indicate its ability to meet its long-term financial obligations.

The debt-to-assets ratio has shown fluctuations over the past five years, with an increase from 0.04 in 2022 to 0.19 in 2023. This ratio suggests that 19% of the company's assets are funded by debt in 2023.

Similarly, the debt-to-capital and debt-to-equity ratios have also increased in 2023 compared to the previous year, indicating a higher level of debt relative to both total capital and shareholders' equity. The debt-to-capital ratio stood at 0.21 in 2023, while the debt-to-equity ratio was at 0.26.

The financial leverage ratio, which measures the company's ability to meet its financial obligations through debt, has shown an increase as well, reaching 1.41 in 2023. This indicates that the company's reliance on debt to finance its operations and growth has increased.

Overall, while the solvency ratios have increased in 2023, showing a higher reliance on debt compared to previous years, the company still maintains a healthy financial position with relatively low levels of debt in relation to its assets, capital, and equity. However, it is important for Knowles Corp to monitor and manage its debt levels effectively to ensure long-term sustainability and minimize financial risk.

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Coverage ratios

Knowles Corp's interest coverage ratio measures its ability to meet interest payments on its debt obligations. The trend in the interest coverage ratio over the past five years indicates fluctuations in the company's ability to cover its interest payments with operating income.

In 2023, the interest coverage ratio was 8.02, which implies that the company generated operating income 8.02 times greater than its interest expenses for that year. This indicates a decrease in the interest coverage ratio compared to the previous year, suggesting a potential decrease in the company's ability to cover interest payments.

The ratio spiked to 25.10 in 2022, indicating a significant improvement in the company's ability to cover interest expenses compared to the prior year. This could signify increased profitability or a decrease in interest expenses during that period.

In 2021, the interest coverage ratio was 8.47, showing a slight decrease from the previous year but still indicating a healthy ability to meet interest obligations.

The ratio of 2.99 in 2020 indicates a lower ability to cover interest payments compared to the preceding years, potentially suggesting increased financial strain or higher interest expenses during that period.

In 2019, the interest coverage ratio was 6.01, showing an improvement compared to 2020 but still lower than the ratios observed in 2021 and 2022.

Overall, fluctuations in Knowles Corp's interest coverage ratio over the past five years suggest varying levels of financial health and ability to cover interest expenses. It is essential for investors and stakeholders to closely monitor this ratio to assess the company's risk of financial distress and its ability to manage its debt obligations effectively.