Kontoor Brands Inc (KTB)
Solvency ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.46 | 0.47 | 0.48 | 0.50 | 0.49 | 0.50 | 0.51 | 0.50 | 0.52 | 0.48 | 0.52 | 0.52 | 0.57 | 0.61 | 0.72 | 0.73 | 0.60 | 0.62 | 0.62 |
| Debt-to-capital ratio | 0.67 | 0.69 | 0.71 | 0.73 | 0.76 | 0.80 | 0.81 | 0.81 | 0.84 | 0.81 | 0.84 | 0.85 | 0.91 | 0.98 | 1.04 | 1.01 | 0.93 | 0.95 | 0.92 |
| Debt-to-equity ratio | 2.05 | 2.21 | 2.39 | 2.77 | 3.12 | 3.96 | 4.39 | 4.29 | 5.34 | 4.19 | 5.08 | 5.89 | 10.49 | 39.25 | — | — | 13.19 | 17.65 | 11.92 |
| Financial leverage ratio | 4.42 | 4.68 | 4.98 | 5.49 | 6.31 | 7.94 | 8.61 | 8.63 | 10.35 | 8.73 | 9.86 | 11.32 | 18.26 | 64.11 | — | — | 21.91 | 28.54 | 19.33 |
Kontoor Brands Inc's solvency ratios show a picture of the company's financial leverage and ability to meet its long-term obligations. The debt-to-assets ratio has been relatively stable over the quarters, ranging from 0.46 to 0.73. This indicates that around 46% to 73% of the company's assets are financed by debt.
The debt-to-capital ratio, which includes both debt and equity in the denominator, has been increasing gradually from 0.67 to 1.04, reflecting a higher reliance on debt for financing the company's operations. This suggests that around 67% to 104% of Kontoor Brands' capital structure is attributed to debt.
The debt-to-equity ratio has shown significant fluctuations, ranging from 2.05 to 39.25. The ratio has been volatile, indicating varying levels of debt relative to equity over the quarters. A higher debt-to-equity ratio suggests greater financial risk due to increased reliance on debt financing.
The financial leverage ratio, which measures the company's total assets in relation to its equity, has also exhibited significant variability, ranging from 4.42 to 64.11. This indicates the extent to which the company's assets are funded by debt, with higher ratios suggesting higher financial risk and lower equity cushion.
Overall, the trends in these solvency ratios suggest that Kontoor Brands Inc has been managing its debt levels and capital structure carefully, although there have been fluctuations in certain quarters. Investors and stakeholders should continue to monitor these ratios to assess the company's ability to meet its long-term financial obligations and sustain its operations.
Coverage ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 7.73 | 8.03 | 8.12 | 9.11 | 10.14 | 9.01 | 9.79 | 8.51 | 7.29 | 7.05 | 6.03 | 4.25 | 2.46 | 2.31 | 1.27 | 3.06 |
The interest coverage ratio for Kontoor Brands Inc has fluctuated over the past few quarters. Generally, a higher interest coverage ratio indicates that the company is more capable of meeting its interest obligations with its earnings.
Looking at the trend, we see that the interest coverage ratio has shown an overall improvement from the end of 2020 through the beginning of 2023, peaking at 10.14 in the fourth quarter of 2022. This indicates that the company's earnings were more than sufficient to cover its interest expenses during this period.
However, there was a slight decline in the interest coverage ratio from the first quarter of 2023 to the third quarter of 2023, though it remained above 7. This suggests that while the company's earnings may still be adequate to cover its interest costs, there may have been some pressure on profitability or an increase in interest expenses during this period.
It is worth noting that the interest coverage ratio has been volatile, with significant fluctuations particularly in the early quarters of 2021 and 2022. This could indicate potential variability in the company's earnings or interest expenses during those periods.
Overall, the company's interest coverage ratio reflects its ability to meet interest obligations with operating earnings, but investors and analysts may want to further investigate the factors driving the fluctuations in the ratio to assess the sustainability of Kontoor Brands Inc's financial health.