MillerKnoll Inc (MLKN)

The solvency analysis of MillerKnoll Inc. based on the provided ratios indicates a generally conservative financial position throughout the reported periods. The Debt-to-assets ratio remains at zero for May 31, 2022, and May 31, 2023, suggesting that the company did not have any reported debt related to total assets during these periods. There is a notable increase to 0.32 on June 3, 2023, which signals that MillerKnoll assumed some level of debt significant enough to constitute approximately 32% of its total assets at that date. However, this ratio returns to zero by May 31, 2024, indicating the company may have reduced or repaid this debt or that the increase was temporary.

Similarly, the Debt-to-capital ratio follows this pattern, remaining at zero for the earlier periods and rising to 0.49 on June 3, 2023. This escalation denotes an increased proportion of debt in the company's overall capital structure at that specific date, with nearly half of the capital being financed through debt. By May 31, 2024, the ratio reverts to zero, implying a repayment or restructuring of liabilities.

The Debt-to-equity ratio aligns with these observations, maintaining a zero level for May 2022 and 2023, followed by a significant increase to 0.95 on June 3, 2023. This indicates that at that point, debt nearly equated to equity, reflecting a moderate shift toward leverage. The subsequent period shows a return to zero, reinforcing the notion of debt reduction or elimination.

The Financial leverage ratio, which measures the extent to which the company's assets are financed through debt relative to equity, shows a decreasing trend from 3.16 in May 2022 to 2.98 in May 2023 and remains steady at 2.98 on June 3, 2023. The ratio continues to slightly decline to 2.92 by May 2024, suggesting a modest reduction in overall financial leverage over time.

In summary, MillerKnoll Inc. appeared to operate with minimal or no debt obligations for most periods, maintaining a conservative capital structure. The temporary increases in debt ratios around June 3, 2023, suggest a brief period of leveraging that was subsequently offset by repayment or restructuring, reverting to a low or zero-debt position. The consistent decrease in the financial leverage ratio further underscores a conservative approach to leverage, emphasizing a stable or improving solvency profile over the analyzed periods.

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Coverage ratios

The interest coverage ratios of MillerKnoll Inc. over the reported periods exhibit significant variations, reflecting the company's changing capacity to meet its interest obligations from operating earnings. As of May 31, 2022, the interest coverage ratio was 0.77, indicating that the company's earnings before interest and taxes (EBIT) were insufficient to cover interest expenses, suggesting potential financial distress or reliance on non-operating income sources to meet interest obligations at that time.

By May 31, 2023, the interest coverage ratio improved markedly to 1.72, signifying a substantial increase in EBIT relative to interest expenses. This improvement suggests that the company strengthened its operating profitability or reduced its interest burden, enhancing its ability to service its debt.

Further data points for June 3, 2023, show a slightly decline to 1.63, maintaining an overall elevated coverage ratio compared to the previous year but indicating some stabilization rather than continuous growth. Moving forward to May 31, 2024, the ratio increased further to 2.31, reflecting a robust improvement in earnings capacity and offering a stronger cushion for interest payments.

The data for May 31, 2025 is not provided, marked as a dash, which may indicate incomplete data or that the period is forecasted or projected and not yet actual. Without available figures for this date, it is not possible to assess the company's interest coverage beyond May 2024.

Overall, the trend from 2022 to 2024 suggests that MillerKnoll Inc. has been progressively strengthening its ability to cover interest expenses, moving from a potentially precarious position to a more sustainable and comfortable level of coverage. This progression indicates improved operational efficiency, profitability, or a combination of both, which may bolster investor confidence concerning the company's debt management and financial stability.