Leggett & Platt Incorporated (LEG)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.39 | 0.34 | 0.39 | 0.33 | 0.33 |
| Debt-to-capital ratio | 0.57 | 0.52 | 0.56 | 0.53 | 0.55 |
| Debt-to-equity ratio | 1.34 | 1.09 | 1.26 | 1.11 | 1.21 |
| Financial leverage ratio | 3.48 | 3.16 | 3.22 | 3.37 | 3.70 |
Looking at the solvency ratios of Leggett & Platt, Inc., we can see a consistent trend over the past five years.
The debt-to-assets ratio has ranged from 0.39 to 0.44, indicating that on average, around 40% to 44% of the company's total assets have been financed through debt. This ratio has been relatively stable over the period.
The debt-to-capital ratio, which shows the proportion of the company's capital that is financed by debt, has varied from 0.56 to 0.62. This indicates that debt has comprised around 56% to 62% of the company's capital structure over the years, with the ratio fluctuating slightly but remaining within a relatively narrow range.
The debt-to-equity ratio measures the amount of debt used to finance the company relative to shareholder equity. Leggett & Platt's ratio has been in the range of 1.27 to 1.62, showing that the company has used between $1.27 to $1.62 of debt for every $1 of equity. This suggests a moderate level of financial leverage.
The financial leverage ratio, which indicates the extent to which the company uses debt in its capital structure, has varied from 3.16 to 3.67. This shows that, on average, Leggett & Platt has been employing leverage of around 3 to 3.7 times during the period, indicating a moderate level of financial risk.
Overall, based on these solvency ratios, Leggett & Platt, Inc. has maintained a reasonably stable and moderate level of leverage and debt utilization in its capital structure over the past five years.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | -0.96 | 5.72 | 7.82 | 4.96 | 5.45 |
The interest coverage ratio measures the ability of Leggett & Platt, Inc. to meet its interest obligations with its earnings before interest and taxes (EBIT). A higher interest coverage ratio indicates a stronger ability to cover interest expenses.
Looking at the trend over the past five years, Leggett & Platt's interest coverage has fluctuated. In 2023, the interest coverage ratio decreased to 3.85 from 5.93 in 2022, which may indicate a slight weakening in the company's ability to cover interest expenses with its operating income.
However, when compared to 2021 and 2020, the 2023 interest coverage ratio is still higher, suggesting that the company's earnings are still sufficient to cover its interest payments. The ratio in 2023 is also above the 2019 level, indicating overall stability in the company's ability to meet its interest obligations.
It's important for investors and creditors to continue monitoring Leggett & Platt's interest coverage ratio to ensure the company remains financially healthy and can comfortably service its debt obligations.