Owens Corning Inc (OC)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.23 | 0.28 | 0.30 | 0.33 | 0.30 |
| Debt-to-capital ratio | 0.34 | 0.40 | 0.41 | 0.44 | 0.39 |
| Debt-to-equity ratio | 0.51 | 0.65 | 0.69 | 0.80 | 0.64 |
| Financial leverage ratio | 2.18 | 2.35 | 2.33 | 2.43 | 2.16 |
Owens Corning's solvency ratios demonstrate the company's ability to meet its long-term financial obligations and manage its debt effectively.
The trend analysis of the debt-to-assets ratio shows a decreasing trend from 0.30 in 2021 to 0.27 in 2023, indicating that Owens Corning has been able to reduce its debt relative to its total assets over the past three years. This suggests a more conservative approach in financing its operations, which can enhance the company's financial stability.
Similarly, the debt-to-capital and debt-to-equity ratios have also shown a declining trend over the same period. The debt-to-capital ratio decreased from 0.41 in 2021 to 0.37 in 2023, while the debt-to-equity ratio decreased from 0.69 in 2021 to 0.59 in 2023. A decreasing trend in these ratios indicates that Owens Corning has been using less debt financing compared to its capital and equity, which may reduce the company's financial risk.
Moreover, the financial leverage ratio, which measures the extent to which the company is using debt to finance its assets, has shown a consistent decline from 2.43 in 2020 to 2.18 in 2023. This decrease suggests that Owens Corning has been reducing its reliance on debt to fund its operations and investments, which can lead to lower financial risk and improved solvency.
Overall, the decreasing trend in Owens Corning's solvency ratios indicates a positive sign of improved financial health and stability, as the company has been effectively managing its debt levels relative to its assets, capital, and equity over the past few years.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 22.01 | 15.81 | 11.43 | -0.92 | 5.51 |
Owens Corning's interest coverage ratio has shown a positive trend over the past five years. The interest coverage ratio measures the company's ability to meet its interest payments on outstanding debt using its operating income.
In 2023, the interest coverage ratio improved significantly to 22.79, indicating that Owens Corning generated operating income nearly 23 times higher than its interest expenses. This is a strong indicator of the company's ability to comfortably meet its interest obligations.
The steady increase in the interest coverage ratio from 2019 to 2023 suggests that Owens Corning has been effectively managing its debt and improving its financial health. The company's ability to cover its interest payments has strengthened over the years, reflecting positively on its financial stability and creditworthiness.
Overall, the improving trend in Owens Corning's interest coverage ratio signifies a healthier financial position and a reduced risk of defaulting on its debt obligations. This trend is reassuring for investors and lenders as it indicates the company's capacity to handle its debt burden while maintaining profitability.