Newell Brands Inc (NWL)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.38 | 0.36 | 0.34 | 0.35 | 0.34 |
| Debt-to-capital ratio | 0.60 | 0.57 | 0.54 | 0.57 | 0.52 |
| Debt-to-equity ratio | 1.47 | 1.35 | 1.17 | 1.33 | 1.09 |
| Financial leverage ratio | 3.91 | 3.77 | 3.43 | 3.79 | 3.15 |
The solvency ratios of Newell Brands Inc indicate its ability to meet its long-term financial obligations.
1. Debt-to-assets ratio:
- The trend shows a slight increase in 2022 but then a decrease in 2023.
- The ratio suggests that 40% of the company's total assets are financed by debt in 2023.
2. Debt-to-capital ratio:
- The ratio has been relatively stable over the years.
- It indicates that 61% of the company's capital is financed by debt in 2023.
3. Debt-to-equity ratio:
- This ratio has shown an upward trend, indicating more reliance on debt for financing.
- In 2023, for every $1 of equity, the company has $1.58 in debt.
4. Financial leverage ratio:
- The ratio has been increasing steadily over the years.
- In 2023, the company has $3.91 in total assets for every $1 of equity.
Overall, the analysis of Newell Brands Inc's solvency ratios suggests that the company has been increasingly relying on debt to finance its operations, as indicated by the upward trends in the debt-to-equity ratio and financial leverage ratio. However, the debt-to-assets and debt-to-capital ratios show some variations, indicating the company's ability to manage its debt levels relative to its assets and capital structure. Investors and stakeholders should closely monitor these ratios to assess the company's solvency and financial health.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | -0.92 | 1.67 | 3.97 | -2.65 | -2.07 |
The interest coverage ratio of Newell Brands Inc has fluctuated over the past five years, ranging from a low of 1.24 times in 2023 to a high of 3.99 times in 2021. This ratio indicates the company's ability to meet its interest obligations with its operating income.
A higher interest coverage ratio is generally more favorable as it suggests the company is more capable of servicing its debt. In 2021, Newell Brands Inc had a stronger interest coverage ratio of 3.99 times, indicating a more comfortable position in meeting its interest payments compared to the other years.
On the other hand, the lower interest coverage ratio of 1.24 times in 2023 may raise concerns about the company's ability to cover its interest expenses from its operating income. This could signal increased financial risk and potential challenges in meeting debt obligations.
Overall, a trend of fluctuating interest coverage ratios should prompt further analysis to understand the underlying factors influencing the company's financial performance and debt repayment capacity.