ODP Corp (ODP)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 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 | 4.37 | 3.53 | 3.22 | 3.38 | 2.96 |
Based on the provided solvency ratios for ODP Corp, the company demonstrates a strong financial position in terms of its debt-related metrics.
1. Debt-to-assets ratio: ODP Corp has consistently maintained a Debt-to-assets ratio of 0.00 from 2020 to 2024. This indicates that the company has no debt relative to its total assets, suggesting a low risk of insolvency due to debt obligations.
2. Debt-to-capital ratio: Similar to the debt-to-assets ratio, the Debt-to-capital ratio has remained at 0.00 over the five-year period. This ratio signifies the proportion of a company's capital that is funded by debt, and ODP Corp's consistent 0.00 ratio implies a capital structure predominantly based on equity rather than debt.
3. Debt-to-equity ratio: ODP Corp's Debt-to-equity ratio also shows a stable figure of 0.00 across the years. This ratio compares a company's total debt to its shareholders' equity and indicates the extent to which the business is financed by external sources rather than internal equity.
4. Financial leverage ratio: The Financial leverage ratio, which measures the company’s use of debt to fund its operations, has shown an increasing trend from 2.96 in 2020 to 4.37 in 2024. This indicates that ODP Corp has been gradually relying more on debt financing over the years, potentially increasing financial risk but also leveraging financial opportunities.
In summary, ODP Corp appears to have a conservative approach to managing debt, as evidenced by its low or zero debt ratios. However, the increasing trend in the financial leverage ratio suggests a shift towards utilizing debt to support business operations as the company grows. Investors and stakeholders may interpret these ratios as indicators of the company's ability to meet its financial obligations and manage risks effectively.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 7.35 | 11.00 | 16.12 | 9.25 | 0.10 |
The interest coverage ratio of ODP Corp has shown a significant improvement over the years, indicating the company's ability to cover its interest expenses with its earnings. In December 2020, the interest coverage ratio was very low at 0.10, which may have raised concerns about the company's ability to meet its interest obligations. However, this ratio improved substantially to 9.25 in December 2021, indicating a healthier financial position and stronger earnings relative to interest expenses.
Moreover, the interest coverage ratio continued to improve in the following years, reaching 16.12 in December 2022 and remaining relatively strong at 11.00 in December 2023. This upward trend suggests that ODP Corp has been managing its debt obligations effectively and generating sufficient earnings to comfortably cover its interest payments.
However, there was a slight decline in the interest coverage ratio to 7.35 in December 2024. While this ratio is still above 1, indicating that the company's earnings are sufficient to cover its interest expenses, the decrease may warrant further scrutiny to ensure that ODP Corp can maintain a healthy balance between earnings and interest obligations in the future.