Louisiana-Pacific Corporation (LPX)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.14 | 0.15 | 0.16 | 0.17 | 0.19 |
| Debt-to-capital ratio | 0.18 | 0.19 | 0.22 | 0.22 | 0.26 |
| Debt-to-equity ratio | 0.22 | 0.24 | 0.28 | 0.28 | 0.35 |
| Financial leverage ratio | 1.57 | 1.64 | 1.78 | 1.69 | 1.85 |
The solvency ratios of Louisiana-Pacific Corp. indicate the company's ability to meet its long-term financial obligations.
The debt-to-assets ratio has shown a declining trend over the past five years, decreasing from 0.19 in 2019 to 0.14 in 2023. This ratio suggests that the company has been able to reduce its reliance on debt to finance its assets, which is a positive sign for its overall financial health.
Similarly, the debt-to-capital ratio has also decreased over the same period, indicating a reduction in the proportion of debt used to finance the company's operations compared to its total capital. This trend is favorable as it means the company is relying less on debt financing.
The debt-to-equity ratio has also shown a downward trend, decreasing from 0.35 in 2019 to 0.22 in 2023. This signifies that the company is progressively relying more on equity financing rather than debt, which can enhance its financial stability and reduce financial risk.
Lastly, the financial leverage ratio, which measures the extent to which the company is using debt to support its operations, has shown some fluctuations but has generally shown improvement, decreasing from 1.85 in 2019 to 1.57 in 2023. A declining trend in this ratio indicates that the company is becoming less leveraged over time.
In summary, the solvency ratios of Louisiana-Pacific Corp. demonstrate a positive trend towards lower debt levels and improved financial stability, indicating a healthier financial position and enhanced ability to meet its long-term obligations.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 15.82 | 98.14 | 119.60 | 37.47 | -1.11 |
The interest coverage ratio for Louisiana-Pacific Corp. has shown a positive trend over the past five years, increasing from 7.30 in 2019 to 38.71 in 2020, and further to 166.73 in 2021. However, there is missing data for this ratio in the latest two years, 2022 and 2023, which limits a complete assessment of the trend. The significant improvement in interest coverage from 2019 to 2021 indicates that the company's ability to meet its interest obligations has strengthened over this period. Nonetheless, the absence of data for 2022 and 2023 makes it challenging to evaluate the most recent performance.