MillerKnoll Inc (MLKN)

The solvency ratios provide insights into MillerKnoll Inc's ability to meet its long-term financial obligations and the extent to which the business relies on external funding. Let's analyze the solvency ratios for the past five years:

1. Debt-to-assets ratio:
- The debt-to-assets ratio indicates the proportion of the company's assets financed by debt. It has shown fluctuations over the past five years, ranging from 0.13 to 0.33. The increasing trend from 2020 to 2023 may indicate a growing dependence on debt to finance assets.

2. Debt-to-capital ratio:
- This ratio measures the proportion of capital that comes from debt. MillerKnoll Inc's debt-to-capital ratio has varied between 0.25 and 0.50. The fluctuations suggest changes in the company's capital structure and its reliance on debt funding.

3. Debt-to-equity ratio:
- The debt-to-equity ratio reflects the degree to which a company is leveraging shareholder equity. The ratio has fluctuated between 0.33 and 0.99 over the last five years. The increasing trend from 2020 to 2023 highlights a higher level of debt relative to equity.

4. Financial leverage ratio:
- This ratio shows the extent to which a company uses debt to finance its assets. MillerKnoll Inc's financial leverage ratio has fluctuated between 2.18 and 3.19. The increasing trend from 2020 to 2023 indicates a higher level of financial leverage and potential increased financial risk.

Overall, the solvency ratios for MillerKnoll Inc have shown fluctuations over the past five years, indicating changes in the company's capital structure and its reliance on debt financing. The increasing trends in the ratios from 2020 to 2023 may raise concerns about the company's ability to meet its long-term obligations and the potential impact on its financial stability. Further analysis and monitoring of these solvency ratios are essential to assess the company's long-term financial health.

---

Coverage ratios

Interest coverage ratio is a financial metric used to evaluate a company's ability to pay its interest expenses on outstanding debt. It is calculated by dividing the company's earnings before interest and taxes (EBIT) by its interest expenses. A higher interest coverage ratio indicates that the company is more capable of meeting its interest obligations.

Based on the provided data, MillerKnoll Inc's interest coverage ratio has fluctuated over the past five years. In June 2023, the interest coverage ratio stood at 2.66, representing an improvement from the previous year's figure of 1.05. This indicates that MillerKnoll's ability to cover its interest expenses with its earnings has strengthened significantly.

However, it's important to note that the significant fluctuations in the interest coverage ratio over the past years could suggest varying levels of financial risk. The sharp decrease in the interest coverage ratio from 16.81 in 2021 to 1.05 in 2022 might indicate a deterioration in the company's ability to meet its interest obligations with its earnings. Conversely, the subsequent improvement to 2.66 in 2023 suggests a recovery in the company's ability to cover its interest expenses.

In summary, while the current interest coverage ratio of 2.66 indicates an improvement in MillerKnoll Inc's ability to meet its interest payments, the considerable fluctuations in the ratio over the past years warrant further analysis to understand the underlying factors driving these changes. A more thorough review of the company's financial performance and debt management practices would provide additional insights into the sustainability of this trend.