Lindsay Corporation (LNN)
Solvency ratios
| Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | Aug 31, 2020 | Aug 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.15 | 0.16 | 0.18 | 0.20 | 0.23 |
| Debt-to-capital ratio | 0.20 | 0.23 | 0.25 | 0.28 | 0.30 |
| Debt-to-equity ratio | 0.25 | 0.29 | 0.34 | 0.39 | 0.43 |
| Financial leverage ratio | 1.64 | 1.81 | 1.88 | 1.91 | 1.87 |
The solvency ratios of Lindsay Corporation indicate its ability to meet its long-term financial obligations. The debt-to-assets ratio has generally decreased from 0.23 in 2019 to 0.15 in 2023. This suggests that the company's reliance on debt in relation to its total assets has decreased over the years, which may indicate improved solvency.
Similarly, the debt-to-capital and debt-to-equity ratios also show a declining trend, indicating a lower proportion of debt in the company's capital structure. This could imply that the company is relying more on equity financing, which may reduce its financial risk and enhance its solvency position.
The financial leverage ratio, which measures the extent of a company's financial leverage, has decreased from 1.87 in 2019 to 1.64 in 2023. This suggests that the company is using less debt in its capital structure to finance its assets. A lower financial leverage ratio indicates lower financial risk and may imply improved solvency.
In conclusion, the downward trend in these solvency ratios suggests that Lindsay Corporation has been gradually reducing its reliance on debt and improving its solvency position over the years. This may indicate a stronger financial position and lower risk of insolvency for the company.
Coverage ratios
| Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | Aug 31, 2020 | Aug 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 27.50 | 21.58 | 11.61 | 11.26 | 1.44 |
The interest coverage of Lindsay Corporation has exhibited significant improvement over the past five years, indicating the company's enhanced ability to meet its interest obligations. The interest coverage ratio has consistently risen from 2.59 in 2019 to 101.68 in 2023. This upward trend suggests that the company's earnings before interest and taxes (EBIT) have been robust enough to cover its interest expenses comfortably. The substantial increase in the interest coverage ratio reflects the company's improved financial stability and reduced risk of default on its debt obligations. Overall, Lindsay Corporation's interest coverage ratio indicates a positive trend in its financial performance and debt management capabilities.