nVent Electric PLC (NVT)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| 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 | 2.08 | 1.96 | 1.79 | 1.87 | 1.81 |
nVent Electric PLC demonstrates strong solvency ratios based on the provided data. The Debt-to-assets ratio, Debt-to-capital ratio, and Debt-to-equity ratio are all consistently at 0.00 across the five-year period from 2020 to 2024. This indicates that the company has no debt in relation to its assets, capital, or equity during this period.
Additionally, the Financial leverage ratio shows a slight increase from 1.81 in 2020 to 2.08 in 2024. This ratio measures the proportion of a company's assets that are financed by debt, indicating that nVent Electric PLC has marginally increased its reliance on debt financing over the five-year period.
Overall, the company's solvency position appears to be strong and stable, with minimal to no debt relative to its assets, capital, and equity. However, the increasing trend in the Financial leverage ratio suggests a slight shift towards using more debt to finance its operations over the years.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 5.05 | 7.40 | 16.15 | 11.65 | 7.37 |
The interest coverage ratio measures a company's ability to meet interest payments on its outstanding debt obligations. Analyzing nVent Electric PLC's interest coverage ratio over the years, we observe positive trends indicating the company's ability to comfortably cover its interest expenses.
As of December 31, 2020, nVent Electric PLC's interest coverage ratio stood at 7.37, suggesting that the company generated 7.37 times the amount of operating income necessary to cover its interest expenses. This ratio improved significantly by December 31, 2022, reaching 16.15, indicating a more robust financial position and greater ability to handle interest payments.
However, there was a slight decline in the interest coverage ratio by December 31, 2023, dropping to 7.40, possibly signaling a temporary decrease in income relative to interest obligations. Furthermore, by December 31, 2024, the interest coverage ratio decreased further to 5.05, potentially indicating a more challenging financial situation or increased debt levels.
Overall, nVent Electric PLC's interest coverage ratio has shown both positive and negative fluctuations over the years, emphasizing the importance of consistently monitoring the company's ability to service its debt obligations. It is crucial for stakeholders to continue assessing the company's financial health and debt management practices to ensure long-term sustainability.