Littelfuse Inc (LFUS)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.21 | 0.22 | 0.19 | 0.25 | 0.26 |
| Debt-to-capital ratio | 0.26 | 0.28 | 0.24 | 0.30 | 0.31 |
| Debt-to-equity ratio | 0.35 | 0.39 | 0.32 | 0.43 | 0.45 |
| Financial leverage ratio | 1.61 | 1.77 | 1.66 | 1.71 | 1.71 |
Littelfuse Inc's solvency ratios demonstrate a consistent pattern of improvement over the past five years. The debt-to-assets ratio has decreased steadily from 0.26 in 2019 to 0.21 in 2023, indicating that the company has reduced its reliance on debt to finance its assets.
Similarly, the debt-to-capital ratio has decreased from 0.31 in 2019 to 0.26 in 2023, indicating a lower proportion of debt in the company's capital structure. The debt-to-equity ratio has followed a similar trend, declining from 0.45 in 2019 to 0.35 in 2023, showing a lower level of financial risk associated with debt compared to equity.
Furthermore, the financial leverage ratio has also decreased over the period, from 1.71 in 2019 to 1.61 in 2023, reflecting a reduction in the company's reliance on debt financing. Overall, these solvency ratios suggest that Littelfuse Inc has improved its financial stability and reduced its leverage, which may indicate a stronger financial position and lower risk of default.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 9.24 | 17.90 | 19.41 | 8.65 | 8.66 |
Based on the data provided, Littelfuse Inc's interest coverage ratio has exhibited some fluctuations over the past five years. The interest coverage ratio indicates the company's ability to meet its interest payments on outstanding debt with its earnings before interest and taxes (EBIT).
In 2023, the interest coverage ratio was 9.24, a decrease from the previous year's ratio of 17.90. This decline suggests that the company's ability to cover its interest expenses with its operating income declined significantly in 2023.
Comparing the 2023 ratio to earlier years, it is also lower than the ratios reported in 2021 (19.41), 2020 (8.65), and 2019 (8.66). The 2023 ratio of 9.24 falls below the historical average, indicating a potential decrease in the company's ability to service its debt obligations from its operating income.
Overall, the declining trend in Littelfuse Inc's interest coverage ratio over the past five years raises concerns about the company's ability to comfortably meet its interest payments using its operating earnings. This trend may indicate increased financial risk and the need for effective management of the company's debt levels and operating performance.