Mueller Water Products (MWA)

Based on the provided data concerning Mueller Water Products' solvency ratios, several observations can be made:

1. Zero Debt Ratios: All three liquidity and leverage ratios—Debt-to-assets ratio, Debt-to-capital ratio, and Debt-to-equity ratio—are consistently reported as zero throughout the entire reporting period from June 30, 2020, through March 31, 2025. This indicates that the company has not reported any debt obligations or leverage related to debt during this timeframe.

2. Financial Leverage Ratio Stability: The Financial Leverage Ratio, which measures the proportion of total assets financed by shareholders’ equity relative to debt, remains relatively stable over the observed periods. It shows a gradual decreasing trend from approximately 2.20 in June 2020 to around 1.91 by March 2025, suggesting a decrease in leverage or an increase in equity relative to total assets.

3. Implications for Solvency: The consistent absence of debt (zero ratios) along with the relatively stable, moderate leverage ratio suggests that Mueller Water Products relies primarily on equity financing rather than debt. The decreasing trend in the financial leverage ratio further indicates a potential shift toward even less reliance on debt financing over time.

4. Overall Assessment: From a solvency standpoint, the company appears to operate without leverage risk related to debt obligations during this period. The zero debt ratios imply a strong solvency profile in terms of debt capacity, although it also reflects a potentially conservative capital structure that avoids leveraging. The stability and decline in leverage suggest a prudent financial position with minimal insolvency risk linked to debt obligations.

In summary, Mueller Water Products' solvency ratios reveal a consistent absence of debt, coupled with a stable and slightly decreasing leverage ratio, indicating a strong solvency profile with minimal financial leverage.

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Coverage ratios

The analysis of Mueller Water Products' interest coverage ratios over the specified periods reveals a predominantly stable and robust capacity to meet interest obligations. Historically, the ratio experienced fluctuations, with a notable low point of 2.60 during the September 30, 2020 quarter, which is indicative of a period when earnings before interest and taxes (EBIT) were relatively weaker compared to interest expenses. Despite this dip, the ratio recovered in subsequent quarters, reaching as high as 7.00 at March 31, 2022, reflecting an improved ability to cover interest payments.

From mid-2022 onwards, the ratio maintained a generally strong level, fluctuating modestly around the 6.0 to 7.5 range. This trend suggests consistent profitability and effective management of interest obligations. The ratios observed in late 2023 and into 2024 show a slight upward trajectory, with the ratio reaching 10.41 at December 31, 2024, and further increasing to 10.86 in the first quarter of 2025. These elevated ratios indicate an increasingly comfortable margin of coverage, implying that earnings before interest and taxes have grown relative to interest expenses.

Overall, the data demonstrates that Mueller Water Products has maintained a favorable interest coverage profile over the analyzed periods, with ratios remaining well above the generally considered safe threshold of 3.0. The trend toward higher ratios in recent periods reflects strengthening earnings relative to interest obligations, suggesting an improved financial position and lower risk associated with debt servicing.