Lamb Weston Holdings Inc (LW)
Solvency ratios
| May 26, 2024 | May 28, 2023 | May 29, 2022 | May 30, 2021 | May 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 4.12 | 4.62 | 11.48 | 8.76 | 19.43 |
Solvency ratios provide insight into a company's ability to meet its long-term debt obligations. Looking at Lamb Weston Holdings Inc's solvency ratios, we observe that the debt-to-assets, debt-to-capital, and debt-to-equity ratios have consistently been reported as 0.00 over the past five years. This suggests that the company has not utilized debt significantly to finance its operations relative to its assets, capital, or equity.
However, the financial leverage ratio, which indicates the proportion of total assets financed by debt, shows fluctuations over the years. The trend reveals a decrease in leverage from 19.43 in 2020 to 4.12 in 2024. This implies that Lamb Weston Holdings has reduced its reliance on debt to fund its assets, thereby improving its financial leverage position.
The consistently low debt ratios indicate a conservative approach to debt management, while the decreasing trend in financial leverage ratio indicates a strengthening of the company's financial position and reduced risk of default. Overall, Lamb Weston Holdings Inc appears to maintain a solid solvency position based on these ratios.
Coverage ratios
| May 26, 2024 | May 28, 2023 | May 29, 2022 | May 30, 2021 | May 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 236.73 | 205.14 | 88.88 | 74.19 | 81.90 |
The interest coverage ratio for Lamb Weston Holdings Inc has been on an increasing trend over the past five years. As of May 26, 2024, the interest coverage ratio stood at 236.73, indicating that the company generated sufficient operating income to cover its interest expenses over 236 times. This is a significant improvement from the ratios of 205.14 in 2023, 88.88 in 2022, 74.19 in 2021, and 81.90 in 2020.
The consistent growth in the interest coverage ratio suggests that Lamb Weston Holdings Inc has been effectively managing its interest obligations relative to its operating performance. A higher interest coverage ratio signifies a lower financial risk as the company has a larger margin of safety to meet its interest payments.
Overall, the upward trend in the interest coverage ratio reflects positively on Lamb Weston Holdings Inc's financial stability and ability to meet its debt obligations comfortably.