Mativ Holdings Inc. (MATV)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.42 | 0.45 | 0.52 | 0.37 | 0.37 |
| Debt-to-capital ratio | 0.54 | 0.58 | 0.65 | 0.48 | 0.48 |
| Debt-to-equity ratio | 1.16 | 1.40 | 1.85 | 0.91 | 0.90 |
| Financial leverage ratio | 2.78 | 3.11 | 3.55 | 2.44 | 2.46 |
The solvency ratios of Mativ Holdings Inc provide insights into the company's ability to meet its financial obligations and the extent to which it relies on debt financing.
1. Debt-to-assets ratio: This ratio measures the proportion of a company's assets that are financed by debt. Mativ Holdings Inc's debt-to-assets ratio has been decreasing over the past five years, indicating a healthier balance between debt and assets. A lower ratio suggests lower financial risk and greater financial stability.
2. Debt-to-capital ratio: The debt-to-capital ratio reflects the percentage of a company's capital that is funded by debt. Mativ Holdings Inc's debt-to-capital ratio has also shown a declining trend, which is favorable as it indicates a decreasing reliance on debt to finance its operations. A lower ratio implies a stronger capital structure and less financial risk.
3. Debt-to-equity ratio: The debt-to-equity ratio measures the proportion of a company's financing that comes from debt compared to equity. Mativ Holdings Inc's debt-to-equity ratio has fluctuated over the years but has generally been decreasing since 2021. A decreasing trend is positive as it indicates a lower level of financial leverage and a more balanced mix of debt and equity financing.
4. Financial leverage ratio: The financial leverage ratio indicates the extent to which a company's operations are financed by debt. Mativ Holdings Inc's financial leverage ratio has also shown a decreasing trend, implying that the company has been reducing its reliance on debt financing over time. A lower financial leverage ratio signifies lower financial risk and potential for improved profitability.
Overall, the downward trends in these solvency ratios suggest that Mativ Holdings Inc has been managing its debt levels effectively and strengthening its financial position. Lower solvency ratios indicate reduced financial risk and better long-term sustainability for the company.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | -3.55 | 1.17 | 2.72 | 4.35 | 3.80 |
The interest coverage ratio measures a company's ability to pay its interest expenses on outstanding debt with its earnings before interest and taxes (EBIT). A higher interest coverage ratio indicates a stronger ability to meet interest obligations.
Mativ Holdings Inc's interest coverage ratio has fluctuated over the past five years:
- In 2023, the interest coverage ratio was 0.16, indicating that the company's EBIT was only able to cover its interest expenses 0.16 times. This is a significant decrease from the previous year.
- In 2022, the interest coverage ratio improved to 0.88, but still implies a limited ability to cover interest expenses.
- In 2021, the interest coverage ratio increased to 2.16, signaling a stronger ability to meet interest payments compared to the previous year.
- In 2020, the interest coverage ratio was 4.77, demonstrating a substantial improvement in the company's ability to cover interest expenses.
- In 2019, the interest coverage ratio was 3.93, showing a relatively stable performance compared to the following years.
Overall, Mativ Holdings Inc's interest coverage ratio has shown variability over the years, with a declining trend in more recent periods. This indicates that the company may be facing challenges in generating sufficient earnings to cover its interest obligations, potentially raising concerns about its financial health and ability to service its debt obligations.