Nordson Corporation (NDSN)

The solvency ratios of Nordson Corporation have shown varying trends over the past five years, indicating changes in the company's capital structure and financial risk profile.

1. Debt-to-assets ratio:
The debt-to-assets ratio increased from 0.09 in 2022 to 0.35 in 2024, indicating that the proportion of assets financed by debt has increased significantly over the period. This may suggest a higher reliance on debt financing to support the company's operations and growth.

2. Debt-to-capital ratio:
Similarly, the debt-to-capital ratio has displayed an upward trend, rising from 0.13 in 2022 to 0.42 in 2024. This increase reflects a larger proportion of the company's capital structure being funded by debt, which could potentially lead to higher interest expenses and financial risk.

3. Debt-to-equity ratio:
The debt-to-equity ratio has also shown fluctuations, with a notable increase from 0.15 in 2022 to 0.72 in 2024. This indicates that the company has taken on more debt relative to its equity to finance its operations, which could result in increased financial leverage and interest payment obligations.

4. Financial leverage ratio:
The financial leverage ratio measures the relationship between the company's total assets and equity. Nordson Corporation's financial leverage ratio fluctuated over the period, with a peak in 2020 at 2.09 and a slight decrease to 2.05 in 2024. This suggests that the company has maintained a relatively stable level of financial leverage despite the changes in debt levels.

Overall, Nordson Corporation's solvency ratios reflect a shift towards higher debt levels in its capital structure over the past five years. Investors and stakeholders may want to closely monitor the company's debt management strategies and overall solvency position to assess its financial health and risk exposure.

---

Coverage ratios

The interest coverage ratio for Nordson Corporation has shown variations over the past five years, ranging from a low of 8.02 in October 2024 to a high of 29.97 in October 2022. This ratio indicates the company's ability to meet its interest obligations with its operating income. Generally, a higher interest coverage ratio implies that the company is more capable of servicing its debt payments from its earnings.

The downward trend observed in the interest coverage ratio from 2022 to 2024 may raise concerns about Nordson Corporation's ability to meet its interest obligations using its operating income alone. A declining interest coverage ratio could signal increasing financial risk for the company, potentially leading to difficulties in meeting debt obligations.

It is important for stakeholders to monitor Nordson Corporation's interest coverage ratio closely and consider factors such as changes in interest rates, profitability, and debt levels to assess the company's financial health and ability to manage its debt obligations in the future.