Newell Brands Inc (NWL)
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 | 4.00 | 3.91 | 3.77 | 3.47 | 3.79 |
Newell Brands Inc has consistently shown a strong solvency position over the past five years, as indicated by its low debt-to-assets, debt-to-capital, and debt-to-equity ratios, all of which are reported as 0.00 for each year from 2020 to 2024. This implies that the company has minimal debt in relation to its assets, capital, and equity, suggesting a low level of financial risk.
However, the financial leverage ratio has shown an increasing trend from 3.79 in 2020 to 4.00 in 2024. This ratio reflects the proportion of a company's assets that are financed by debt compared to equity. While an increase in the financial leverage ratio can indicate higher financial risk and dependency on debt financing, the overall low debt ratios suggest that Newell Brands Inc has managed its leverage effectively to maintain a healthy financial position.
In conclusion, the solvency ratios of Newell Brands Inc demonstrate a conservative capital structure with minimal reliance on debt, contributing to the company's financial stability and strength.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 0.12 | -0.30 | 3.51 | 4.38 | -2.65 |
Interest coverage ratio is a key financial metric that indicates a company's ability to meet its interest obligations on outstanding debt from its operating income. A ratio below 1 means the company is not generating enough operating income to cover its interest expenses, signifying financial risk.
Analyzing the interest coverage ratios of Newell Brands Inc from 2020 to 2024, we observe a fluctuating trend.
1. In December 31, 2020, the interest coverage ratio was reported as -2.65, indicating that the company's operating income was insufficient to cover its interest expenses, which raises concerns about its financial health and ability to service its debt obligations.
2. By December 31, 2021, Newell Brands Inc improved its interest coverage ratio to 4.38, showing a positive trend. A ratio above 1 suggests that the company's operating income is sufficient to cover interest payments, which is a positive sign for creditors and investors.
3. Subsequently, in December 31, 2022, the interest coverage ratio decreased to 3.51. Although the ratio is still above 1, the downward trend may indicate either an increase in interest expenses or a decline in operating income, requiring further investigation.
4. However, the ratio dropped significantly to -0.30 by December 31, 2023, indicating a concerning situation where the company's operating income is insufficient to cover its interest expenses. This could suggest financial distress and the need for proactive measures to improve the company's financial position.
5. Lastly, by December 31, 2024, the interest coverage ratio slightly improved to 0.12. While still below 1, reflecting ongoing challenges in meeting interest obligations from operating income.
In conclusion, Newell Brands Inc's interest coverage ratios exhibit volatility over the years, highlighting fluctuations in its ability to cover interest expenses with operating income. It's essential for stakeholders to closely monitor these ratios for any unsustainable trends impacting the company's financial stability and debt-servicing capabilities.