MillerKnoll Inc (MLKN)

Solvency ratios provide insights into a company's ability to meet its long-term debt obligations. Let's analyze the solvency ratios of MillerKnoll Inc based on the provided data:

1. Debt-to-assets ratio: This ratio indicates the proportion of a company's assets financed by debt. MillerKnoll Inc's debt-to-assets ratio has shown some fluctuations over the past few years, ranging from 0.13 to 0.35. A lower ratio suggests less reliance on debt for asset financing, while a higher ratio may indicate higher financial risk.

2. Debt-to-capital ratio: The debt-to-capital ratio reflects the percentage of a company's capital that is financed by debt. MillerKnoll Inc's debt-to-capital ratio has also varied, with values between 0.23 and 0.52. A lower ratio implies a lower financial risk and vice versa.

3. Debt-to-equity ratio: The debt-to-equity ratio shows the proportion of a company's financing that comes from debt versus equity. MillerKnoll Inc's debt-to-equity ratio has fluctuated between 0.30 and 1.08, indicating changes in the company's capital structure. A lower ratio usually signifies lower risk, while a higher ratio suggests higher financial leverage.

4. Financial leverage ratio: The financial leverage ratio measures the extent to which a company uses debt to finance its operations. MillerKnoll Inc's financial leverage ratio has ranged from 2.19 to 3.23, indicating the level of financial risk the company carries. A higher ratio implies higher financial leverage and risk.

In summary, the solvency ratios of MillerKnoll Inc show fluctuations over the years, indicating changes in the company's capital structure and reliance on debt. It is essential to monitor these ratios closely to assess the company's ability to meet its long-term debt obligations and manage financial risk effectively.

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Coverage ratios

The interest coverage ratio for MillerKnoll Inc has displayed varying trends over the past few years. As of Nov 30, 2024, the interest coverage ratio stands at 2.38, showing an improvement compared to the previous quarter where it was at 2.12 in Aug 31, 2024. This indicates that the company's ability to cover its interest expenses with its operating income has strengthened.

Looking further back, the interest coverage ratio has generally been fluctuating within a range. It was at 2.10 on Mar 2, 2024, 1.76 on Dec 2, 2023, and 1.47 on Sep 2, 2023. The ratio showed a significant increase at 2.43 on Mar 4, 2023, and reached a high point of 22.77 on Feb 29, 2020. However, there were also periods of lower coverage such as 0.58 on May 28, 2022, and even negative coverage of -0.82 on Feb 26, 2022.

It's notable that the interest coverage ratio was exceptionally high at 17.03 on May 29, 2021, and above 20 in the quarters prior to 2022. This indicates that the company was generating significant operating income in relation to its interest expenses during that period.

In general, an interest coverage ratio above 1 indicates that the company is generating enough operating income to cover its interest expenses. A higher ratio is preferable as it signifies a greater ability to meet interest obligations. MillerKnoll Inc's interest coverage ratio has shown variability, with some quarters exhibiting strong coverage and others showing weaker performance. Further monitoring of this ratio will be important to assess the company's financial health and ability to service its debt obligations.