Callaway Golf Company (MODG)

Solvency ratios

	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Debt-to-assets ratio	0.17	0.17	0.17	0.17	0.14	0.13	0.13	0.13	0.13	0.14	0.15	0.17	0.33	0.33	0.34	0.21	0.23	0.24	0.24	0.24
Debt-to-capital ratio	0.28	0.28	0.28	0.29	0.24	0.22	0.22	0.22	0.22	0.22	0.22	0.25	0.49	0.49	0.50	0.37	0.37	0.36	0.38	0.39
Debt-to-equity ratio	0.39	0.39	0.39	0.40	0.31	0.28	0.28	0.29	0.28	0.28	0.28	0.33	0.96	0.95	1.01	0.60	0.58	0.57	0.61	0.63
Financial leverage ratio	2.35	2.27	2.28	2.35	2.28	2.16	2.15	2.18	2.10	1.99	1.94	1.97	2.93	2.86	2.98	2.81	2.55	2.39	2.54	2.61

Solvency ratios are crucial indicators of a company's ability to meet its long-term financial obligations. In the case of Topgolf Callaway Brands Corp, we observe the following trends in its solvency ratios over the past eight quarters:

1. Debt-to-assets ratio: This ratio measures the proportion of a company's assets financed by debt. Topgolf Callaway Brands Corp has maintained a relatively stable debt-to-assets ratio ranging between 0.24 and 0.28, indicating that around 24% to 28% of its assets are funded by debt.

2. Debt-to-capital ratio: The debt-to-capital ratio reflects the percentage of a company's capital that is financed by debt. The company's debt-to-capital ratio has also shown consistency, hovering between 0.31 and 0.40 over the quarters, signifying that between 31% and 40% of its capital is derived from debt.

3. Debt-to-equity ratio: This ratio compares the company's total debt to its shareholders' equity. Topgolf Callaway Brands Corp has displayed a gradual increase in its debt-to-equity ratio from 0.44 to 0.66, implying that the company has been utilizing more debt in relation to equity to fund its operations.

4. Financial leverage ratio: The financial leverage ratio measures the extent to which a company uses debt to finance its assets. Topgolf Callaway Brands Corp's financial leverage ratio has remained relatively steady, ranging from 2.15 to 2.35. This indicates that the company has been maintaining a consistent level of leverage in its capital structure.

Overall, the solvency ratios of Topgolf Callaway Brands Corp suggest that the company has managed its debt levels prudently, maintaining a balance between debt and equity financing. Despite some fluctuations, these ratios indicate a stable solvency position for the company over the analyzed quarters.

Coverage ratios

	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Interest coverage	1.17	1.22	1.31	1.57	1.99	1.87	2.01	1.78	4.04	5.55	6.66	3.81	-1.72	-1.61	-2.45	3.00	3.49	3.88	3.97	8.90

Interest coverage ratio is a critical financial metric that indicates a company's ability to meet its interest obligations from its operating income. A higher interest coverage ratio implies a stronger ability to cover interest expenses.

Analyzing the interest coverage ratios of Topgolf Callaway Brands Corp over the past eight quarters, we observe a declining trend. The interest coverage ratio decreased from 1.80 in Q4 2022 to 1.13 in Q4 2023, indicating a weakening ability to cover interest expenses with operating income.

The decreasing trend in the interest coverage ratio may signify growing financial risk for the company, as it suggests that the earnings before interest and taxes (EBIT) are becoming less sufficient to cover interest payments. A ratio below 1 means that the company is not generating enough operating income to cover its interest expenses, which could raise concerns about the company's financial health and its ability to service its debt obligations.

It is essential for investors and stakeholders to closely monitor the interest coverage ratio of Topgolf Callaway Brands Corp to assess the company's financial stability and its ability to manage debt effectively. Any further deterioration in the interest coverage ratio may raise red flags regarding the company's financial soundness and could potentially impact its creditworthiness and overall future prospects.