Nucor Corp (NUE)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 1.69 | 1.76 | 1.84 | 1.87 | 1.77 |
The solvency ratios of Nucor Corp. provide insights into the company's ability to meet its long-term financial obligations. Over the 5-year period from 2019 to 2023, the debt-to-assets ratio has shown a fluctuating trend, decreasing from 0.24 in 2019 to 0.19 in 2023. This indicates that Nucor has been effectively managing its debt in relation to its total assets, which may suggest a stronger financial position and lower risk.
Similarly, the debt-to-capital ratio and debt-to-equity ratio have also shown a decreasing trend over the same period. The debt-to-capital ratio decreased from 0.30 in 2019 to 0.25 in 2023, while the debt-to-equity ratio decreased from 0.42 in 2019 to 0.33 in 2023. These declining ratios suggest that Nucor has been reducing its reliance on debt financing in proportion to its total capital and equity, which is a positive sign for the company's financial health.
Furthermore, the financial leverage ratio, which indicates the level of a company's debt in relation to its equity, has also demonstrated a downward trend from 1.77 in 2019 to 1.69 in 2023. This implies that Nucor has been decreasing its leverage, meaning the company's reliance on debt has been decreasing compared to its equity, which could potentially lower financial risk and improve solvency.
Overall, the trend of decreasing solvency ratios for Nucor Corp. over the past five years suggests that the company has been effectively managing its debt levels relative to its assets, capital, and equity. This may indicate a strengthening financial position and improved ability to meet its long-term financial obligations.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 24.93 | 45.64 | 55.60 | 5.33 | 11.70 |
The interest coverage ratio measures a company's ability to meet its interest obligations using its earnings before interest and taxes (EBIT). A higher interest coverage ratio indicates a stronger ability to cover interest expenses. In the case of Nucor Corp., the interest coverage ratio has shown a fluctuating trend over the past five years.
In 2019, Nucor Corp. had an interest coverage ratio of 16.23, indicating that it could cover its interest expenses approximately 16 times with its EBIT. This is a good sign of financial health. However, in 2020, the ratio dropped to 10.46, suggesting a slight weakening of the company's ability to cover its interest payments.
The interest coverage ratio improved significantly in 2021 and 2022, reaching 59.31 and 61.79, respectively. These substantial increases indicate a much stronger ability to cover interest expenses during those years.
The lack of data for 2023 makes it challenging to provide a complete analysis of the current situation. However, based on the trend observed from 2019 to 2022, the company seems to have strengthened its ability to cover interest expenses, which is a positive indicator of financial stability.