ODP Corp (ODP)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| 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 | 3.53 | 3.22 | 3.38 | 2.99 | 3.36 |
Based on the solvency ratios provided for ODP Corp over the past five years, it is evident that the company has consistently maintained a debt-free capital structure as indicated by the debt-to-assets, debt-to-capital, and debt-to-equity ratios all being reported as 0.00. This suggests that ODP Corp has not utilized debt to finance its operations or investments during this period.
However, when looking at the financial leverage ratio, which measures the extent to which the company relies on debt in its capital structure, there is variability in the ratio over the years. The financial leverage ratio has fluctuated between 2.99 and 3.53, with the highest leverage reported in 2023.
A financial leverage ratio above 1 indicates that the company has more debt than equity in its capital structure, and a higher ratio signifies a higher level of financial risk. Despite the fluctuations, ODP Corp's financial leverage ratio has remained relatively stable over the years, suggesting a moderate level of reliance on debt financing compared to equity.
Overall, the consistently low debt ratios indicate that ODP Corp has maintained a conservative approach to managing its solvency and financial risk, which can be seen as a positive indicator of the company's financial health and stability.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 11.00 | 15.38 | -4.86 | -6.00 | 2.69 |
The interest coverage ratio of ODP Corp has varied significantly over the past five years. In 2023, the interest coverage ratio was 11.00, indicating that the company's operating income was 11 times higher than its interest expenses for that year. This represents a strong ability to meet interest payments.
In 2022, the interest coverage ratio improved further to 15.38, demonstrating an even better capacity to cover interest obligations. However, in 2021, the ratio was negative at -4.86, indicating that the company's operating income was insufficient to cover its interest expenses during that period. This is a concerning sign as it raises questions about the company's financial health and ability to service its debt.
Similarly, in 2020 and 2019, the interest coverage ratios were -6.00 and 2.69 respectively, showing a fluctuating trend in the company's ability to cover interest payments.
Overall, ODP Corp's interest coverage ratio has been inconsistent, with periods of strong coverage followed by negative ratios. This suggests a degree of financial instability and highlights the importance of closely monitoring the company's financial performance and debt management strategies.