Knowles Cor (KN)

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

1. Debt-to-assets ratio: This ratio measures the proportion of the company's assets financed by debt. Knowles Cor's debt-to-assets ratio has been relatively low and stable, increasing from 0.00 in 2020 to 0.12 in 2024. This suggests that the company has been conservative in using debt to finance its assets.

2. Debt-to-capital ratio: The debt-to-capital ratio reflects the extent of a company's capital structure that is debt-funded. Knowles Cor's debt-to-capital ratio has shown a gradual increase from 0.00 in 2020 to 0.15 in 2024, indicating a slightly higher reliance on debt financing over the years.

3. Debt-to-equity ratio: This ratio compares a company's total debt to its shareholders' equity, showing the level of financial leverage. Knowles Cor's debt-to-equity ratio has also shown an upward trend, from 0.00 in 2020 to 0.18 in 2024, indicating increasing leverage and potential risk associated with higher debt levels.

4. Financial leverage ratio: The financial leverage ratio measures the extent to which a company utilizes debt in its capital structure. Knowles Cor's financial leverage ratio has fluctuated over the years, ranging from 1.19 in 2022 to 1.48 in 2024. This suggests that the company's use of debt has increased, leading to higher financial risk.

Overall, Knowles Cor's solvency ratios indicate a moderate level of debt utilization and financial leverage, with a slight increase in leverage over the years. It is important for investors and stakeholders to monitor these ratios to assess the company's ability to service its debt and sustain its financial health in the long term.

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Coverage ratios

The interest coverage ratio reflects Knowles Cor's ability to meet its interest obligations from its operating income. Looking at the trend over the past five years, we observe fluctuations in the interest coverage ratio.

In December 31, 2020, the interest coverage ratio was 1.66, indicating that Knowles Cor's operating income was just able to cover its interest expenses. However, in December 31, 2021, the ratio improved significantly to 7.82, suggesting a stronger ability to cover interest payments.

The ratio then took a sharp downturn in December 31, 2022, dropping to -90.17. This negative figure implies that the company's operating income was insufficient to cover its interest expenses, which raises concern about its financial stability.

Fortunately, the trend reversed in the following years: by December 31, 2023, the interest coverage ratio had climbed to 6.72, indicating a more favorable position in meeting interest obligations. Lastly, in December 31, 2024, the ratio decreased slightly to 3.18, still showing an ability to cover interest expenses, although not as comfortably as in the previous year.

Overall, the fluctuating trend in Knowles Cor's interest coverage ratio suggests variability in its ability to meet interest payments, with the year 2022 standing out as a period of particular financial vulnerability. Monitoring this ratio over time will be crucial to assess the company's financial health and ability to manage its debt obligations effectively.