Quaker Chemical Corporation (KWR)

Quaker Houghton's solvency ratios indicate the company's ability to meet its long-term financial obligations and the extent of its leverage.

The debt-to-assets ratio has shown a declining trend over the past five years, decreasing from 0.32 in 2019 to 0.28 in 2023. This suggests that the company's level of debt relative to its total assets has been decreasing, which may indicate improved financial stability and lower risk.

Similarly, the debt-to-capital ratio has also shown a decreasing trend, moving from 0.43 in 2019 to 0.35 in 2023. This indicates that the proportion of the company's capital structure funded by debt has decreased over the years, which could lead to lower interest payments and reduced financial risk.

The debt-to-equity ratio has exhibited a downward trend as well, declining from 0.74 in 2019 to 0.54 in 2023. This decrease shows that the company's reliance on debt financing relative to equity has decreased, implying a stronger financial position and potentially lower bankruptcy risk.

Lastly, the financial leverage ratio has been decreasing from 2.30 in 2019 to 1.96 in 2023. This reduction signifies that the company's reliance on debt to finance its operations has been decreasing, indicating a more conservative capital structure and potentially lower financial risk.

Overall, the solvency ratios of Quaker Houghton demonstrate a positive trend of decreasing leverage and financial risk, indicating potential improvements in the company's long-term financial health and ability to meet its debt obligations.

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Coverage ratios

Quaker Houghton's interest coverage ratio has exhibited fluctuations over the past five years. The ratio ranged from 4.68 to 8.29 during this period, indicating the company's ability to meet its interest obligations from its earnings before interest and taxes. A higher interest coverage ratio suggests a stronger ability to cover interest expenses with operating income. Although the ratio peaked in 2021, it has since declined but remains at levels indicating a comfortable ability to manage interest payments. Further analysis may be necessary to understand the factors driving these fluctuations in the interest coverage ratio.