Quanex Building Products (NX)
Solvency ratios
| Jan 31, 2024 | Oct 31, 2023 | Jul 31, 2023 | Apr 30, 2023 | Jan 31, 2023 | Oct 31, 2022 | Jul 31, 2022 | Apr 30, 2022 | Jan 31, 2022 | Oct 31, 2021 | Jul 31, 2021 | Apr 30, 2021 | Jan 31, 2021 | Oct 31, 2020 | Jul 31, 2020 | Apr 30, 2020 | Jan 31, 2020 | Oct 31, 2019 | Jul 31, 2019 | Apr 30, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 1.47 | 1.52 | 1.61 | 1.67 | 1.74 | 1.56 | 1.65 | 1.70 | 1.69 | 1.71 | 1.77 | 1.81 | 1.84 | 1.94 | 2.02 | 2.20 | 2.02 | 1.95 | 1.88 | 1.96 |
Quanex Building Products' solvency ratios, as reflected in the provided data, indicate a consistent trend of low leverage and a strong financial position in terms of debt obligations in relation to assets, capital, and equity. The debt-to-assets, debt-to-capital, and debt-to-equity ratios have all been consistently reported as 0.00, indicating that the company carries no debt relative to its assets, capital, or equity.
On the other hand, the financial leverage ratio has exhibited some variation over the period, ranging from a low of 1.47 to a high of 2.20. Despite this variability, the financial leverage ratio generally remains below 2.0, signifying that the company relies moderately on debt to finance its operations and investments.
Overall, the solvency ratios suggest that Quanex Building Products has maintained a prudent approach to managing its debt levels and has a healthy solvency position, with a relatively low level of financial risk.
Coverage ratios
| Jan 31, 2024 | Oct 31, 2023 | Jul 31, 2023 | Apr 30, 2023 | Jan 31, 2023 | Oct 31, 2022 | Jul 31, 2022 | Apr 30, 2022 | Jan 31, 2022 | Oct 31, 2021 | Jul 31, 2021 | Apr 30, 2021 | Jan 31, 2021 | Oct 31, 2020 | Jul 31, 2020 | Apr 30, 2020 | Jan 31, 2020 | Oct 31, 2019 | Jul 31, 2019 | Apr 30, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 15.77 | 12.93 | 13.80 | 16.35 | 23.93 | 43.89 | 46.35 | 43.35 | 36.83 | 32.66 | 28.54 | 22.35 | 14.85 | 10.59 | 0.55 | 0.84 | -2.52 | -2.73 | 0.87 | 0.66 |
The interest coverage ratio for Quanex Building Products fluctuated significantly over the past few years. The ratio measures the company's ability to meet its interest obligations with its operating income. In general, a higher interest coverage ratio indicates a lower risk of default on debt payments.
From January 2020 to July 2022, the interest coverage was comfortably above 10, indicating a strong ability to cover interest expenses with operating income. During this period, the company's financial health appeared robust, with the ratio peaking at 46.35 in July 2022, suggesting a solid ability to service debt obligations.
However, there was a notable decline in the interest coverage ratio in the subsequent quarters, dropping to below 1 in the last three reported periods. This sharp decrease is a concerning trend as it indicates that the company's operating income may not be sufficient to cover its interest expenses. A ratio below 1 means the company is not generating enough operating income to cover interest payments, which could raise solvency issues and potential financial distress.
Overall, the recent trend in Quanex Building Products' interest coverage raises red flags about its ability to meet interest obligations using its operating profits. It is crucial for investors and stakeholders to monitor this ratio closely to assess the company's financial health and debt servicing capabilities.