Middleby Corp (MIDD)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.34 | 0.39 | 0.37 | 0.33 | 0.37 |
| Debt-to-capital ratio | 0.42 | 0.49 | 0.49 | 0.46 | 0.49 |
| Debt-to-equity ratio | 0.73 | 0.96 | 0.96 | 0.86 | 0.96 |
| Financial leverage ratio | 2.13 | 2.46 | 2.56 | 2.63 | 2.57 |
Middleby Corp's solvency ratios provide insights into the company's ability to meet its long-term financial obligations and the extent to which it relies on debt financing. The trend analysis of these ratios over the past five years reveals some important dynamics.
1. Debt-to-assets ratio: The trend for the debt-to-assets ratio has been relatively stable, ranging from 0.33 to 0.39 over the five-year period. This indicates that, on average, Middleby Corp finances around 33% to 39% of its total assets using debt, leaving a significant portion covered by equity.
2. Debt-to-capital ratio: The debt-to-capital ratio has shown a somewhat decreasing trend, declining from 0.49 in 2019 to 0.42 in 2023. This suggests that the proportion of capital financed by debt has decreased, signaling a potentially improving financial position in terms of capital structure.
3. Debt-to-equity ratio: The debt-to-equity ratio has also shown a decreasing trend from 0.96 in 2019 to 0.73 in 2023. This indicates that Middleby Corp has been reducing its reliance on debt financing in relation to equity, which generally enhances the company's solvency and financial stability.
4. Financial leverage ratio: The financial leverage ratio, which indicates the proportion of assets financed by debt relative to equity, has shown a declining trend from 2.57 in 2019 to 2.13 in 2023. This decrease implies a lower level of financial risk and leverage, which can provide a cushion against economic downturns or financial challenges.
Overall, the downward trends in the debt-to-capital, debt-to-equity, and financial leverage ratios suggest that Middleby Corp has been moving towards a more conservative capital structure with lower reliance on debt. These improvements in solvency ratios could enhance the company's long-term financial stability and resilience to economic uncertainties.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 4.16 | 7.19 | 11.02 | 4.13 | 6.22 |
The interest coverage ratio for Middleby Corp has exhibited fluctuations over the past five years. In 2023, the interest coverage ratio was 4.16, representing a decrease from the previous year's ratio of 7.19. This decline indicates that the company's ability to cover its interest expenses with operating income has weakened.
Comparing the 2023 ratio to the ratios from 2021 and 2022, it is evident that Middleby Corp had stronger interest coverage in those years, with ratios of 11.02 and 7.19, respectively. This suggests that the company's ability to meet its interest obligations improved during those periods.
In 2020 and 2019, the interest coverage ratios were 4.13 and 6.22, respectively. These ratios show that Middleby Corp had similar levels of interest coverage in those years as was observed in 2023, indicating a stable performance in managing interest expenses relative to operating income.
Overall, while the company experienced a decline in interest coverage in 2023, its historical performance indicates that it has had periods of stronger ability to cover interest expenses with operating income. Analysts may want to further investigate the factors contributing to the fluctuation in the interest coverage ratio to assess the company's financial health and sustainability.