Kontoor Brands Inc (KTB)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.45 | 0.46 | 0.49 | 0.52 | 0.57 |
| Debt-to-capital ratio | 0.65 | 0.67 | 0.76 | 0.84 | 0.91 |
| Debt-to-equity ratio | 1.85 | 2.05 | 3.12 | 5.34 | 10.49 |
| Financial leverage ratio | 4.13 | 4.42 | 6.31 | 10.35 | 18.26 |
Based on the provided data, Kontoor Brands Inc's solvency ratios have shown a consistent improvement over the years, indicating a strengthening financial position. The Debt-to-assets ratio has decreased from 0.57 in 2020 to 0.45 in 2024, indicating that the company's proportion of assets financed by debt has been decreasing over time.
Similarly, the Debt-to-capital ratio has declined from 0.91 in 2020 to 0.65 in 2024, suggesting that the company has been relying less on debt to fund its operations compared to its capital structure.
The Debt-to-equity ratio has seen a significant drop from 10.49 in 2020 to 1.85 in 2024, showing a substantial reduction in the company's leverage and its reliance on equity as a source of financing.
Furthermore, the Financial leverage ratio has shown a notable decrease from 18.26 in 2020 to 4.13 in 2024, indicating that the company has been effectively managing its debt levels relative to its equity.
Overall, the downward trend in these solvency ratios reflects Kontoor Brands Inc's ability to reduce its debt burden, strengthen its financial position, and improve its long-term sustainability.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 8.38 | 7.73 | 10.14 | 7.29 | 2.46 |
Interest coverage, a key financial ratio used to evaluate a company's ability to cover its interest expenses with its operating income, has exhibited significant improvement for Kontoor Brands Inc over the past few years.
As of December 31, 2020, Kontoor Brands had an interest coverage ratio of 2.46, indicating that its operating income was able to cover its interest expenses approximately 2.46 times. However, by December 31, 2024, the interest coverage ratio had increased to 8.38, suggesting a notable enhancement in the company's ability to meet its interest obligations from its operating earnings.
The trend of increasing interest coverage ratios from 2020 to 2024 signifies a positive development in the company's financial health and a higher degree of safety for creditors regarding interest payments. This improvement reflects better operating performance and potentially lower financial risk for Kontoor Brands Inc.
Overall, the rising trend in interest coverage ratios for Kontoor Brands Inc demonstrates a positive trajectory in managing its interest obligations and suggests a strengthened financial position over the analyzed period.