Neogen Corporation (NEOG)

Neogen Corporation has exhibited a strong financial position in terms of solvency ratios over the past five years. The Debt-to-assets ratio indicates that the company has maintained a low level of debt relative to its total assets, with a consistent ratio of 0.00 throughout the period. This suggests that Neogen has not heavily relied on debt to finance its operations or investments.

Similarly, the Debt-to-capital ratio and Debt-to-equity ratio both remained at 0.00 across the years, highlighting that Neogen's capital structure has been predominantly equity-financed rather than debt-financed. This signifies a conservative approach to managing financial risk and indicates a healthy level of financial stability within the company.

The Financial leverage ratio slightly increased from 1.10 in May 31, 2020, to 1.45 in May 31, 2023 and 2024. This indicates that Neogen's financial leverage has increased modestly over the years, which may suggest a shift towards a slightly more leveraged capital structure. However, with a ratio still below 2, the company's reliance on debt as a source of financing remains relatively moderate.

Overall, Neogen Corporation's solvency ratios reflect a financially prudent and stable position, with minimal debt and a well-balanced capital structure.

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Coverage ratios

Neogen Corporation's interest coverage ratio has shown significant fluctuations over the years. As of May 31, 2020, the company had an interest coverage of 2.91, indicating that it could cover its interest expenses nearly three times over with its operating income. The following year, the interest coverage ratio increased drastically to 990.44, suggesting a substantial improvement in the company's ability to meet its interest obligations.

However, in the subsequent years, Neogen Corporation experienced a decline in its interest coverage ratio. By May 31, 2023, the ratio dropped to 0.67, indicating a concerning sign as the company's operating income might not be sufficient to cover its interest expenses. The trend continued into the following year, with the interest coverage ratio slightly improving to 0.84, but still remaining at a level that raises questions about the company's ability to meet its interest payments comfortably.

Overall, Neogen Corporation's interest coverage has been volatile, with fluctuations that may warrant monitoring and further investigation to assess the company's financial stability and ability to service its debt obligations in the future.