Quanex Building Products (NX)
Solvency ratios
| Oct 31, 2024 | Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 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 | 2.30 | 1.52 | 1.56 | 1.71 | 1.94 |
Quanex Building Products has consistently maintained a debt-free financial structure over the past five years, as indicated by a debt-to-assets ratio, debt-to-capital ratio, and debt-to-equity ratio of 0.00 across all years. This reflects a conservative approach to financing operations and indicates a lower level of financial risk associated with borrowing.
On the other hand, the financial leverage ratio has ranged from 1.52 to 2.30 over the same period. The increase in the financial leverage ratio from 1.52 in 2023 to 2.30 in 2024 suggests a higher reliance on debt to finance the company's assets. While this higher financial leverage ratio may indicate increased financial risk due to higher debt levels, it can also suggest potential opportunities for leveraging debt to fund growth initiatives or improve overall profitability.
Overall, Quanex Building Products' solvency ratios suggest a stable and conservative financial position with no debt, coupled with a recent increase in financial leverage that may warrant further monitoring to ensure sustainable financial health and growth.
Coverage ratios
| Oct 31, 2024 | Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 3.04 | 12.93 | 43.89 | 32.66 | 10.59 |
The interest coverage ratio measures a company's ability to pay interest expenses on its outstanding debt. A higher ratio implies a greater ability to meet interest obligations. Quanex Building Products' interest coverage has fluctuated over the past five years, ranging from a low of 3.04 in 2024 to a high of 43.89 in 2022. The significant decrease in 2024 suggests a potential decrease in earnings available to cover interest expenses. However, despite the decline, the interest coverage ratio of 3.04 still indicates that Quanex Building Products is generating sufficient earnings to cover its interest obligations. It is important for stakeholders to monitor this ratio over time to assess the company's ability to service its debt effectively.