Mattel Inc (MAT)

The solvency ratios of Mattel Inc indicate the company's ability to meet its long-term financial obligations and the extent to which it relies on debt financing.

The debt-to-assets ratio has shown a decreasing trend over the last five years, indicating that the company's reliance on debt to finance its assets has been decreasing. This is a positive sign as it suggests that the company has more assets relative to its debts, which implies better financial health.

Similarly, the debt-to-capital ratio has also declined over the same period, suggesting that the proportion of debt in the company's capital structure has decreased. This implies that Mattel Inc has been able to rely less on debt and more on equity financing for its operations.

The debt-to-equity ratio has also followed a decreasing trend, indicating that the company's level of debt in relation to equity has been decreasing. This is favorable as a lower debt-to-equity ratio signifies lower financial risk and better financial stability.

The financial leverage ratio, which measures the company's total assets relative to its equity, has also shown a decreasing trend. This implies that Mattel Inc has been relying less on borrowed funds to finance its assets, which can lower the risk of financial distress and reduce the company's reliance on external financing.

Overall, the solvency ratios of Mattel Inc have been improving over the past five years, indicating a healthier financial position with reduced reliance on debt financing. This trend suggests that the company has been effectively managing its financial obligations and capital structure to ensure long-term stability and sustainability.

---

Coverage ratios

The interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt. A higher ratio indicates a stronger ability to cover interest obligations from operating earnings.

Looking at the trend for Mattel Inc's interest coverage ratio from 2019 to 2023, we observe significant improvement year over year. The ratio has increased from 0.20 in 2019 to 4.91 in 2023. This indicates that Mattel's operating earnings are increasingly more sufficient to cover its interest expenses.

The substantial increase in the interest coverage ratio over the years reflects positively on the company's financial health and risk management. It suggests that Mattel has become more efficient in generating operating income to pay off its interest obligations.

Overall, the improving trend in Mattel's interest coverage ratio signifies a strengthened financial position and reduced risk of default on debt payments. This positive trend may instill confidence in investors and creditors regarding the company's ability to manage its debt effectively.