Olin Corporation (OLN)
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 | 3.69 | 3.46 | 3.16 | 3.21 | 5.70 |
Olin Corporation has consistently maintained a strong solvency position, as indicated by its debt-related ratios. The debt-to-assets, debt-to-capital, and debt-to-equity ratios have all remained at 0.00 over the five-year period from 2020 to 2024. This suggests that Olin Corporation has effectively managed its debt levels in relation to its assets, capital, and equity, indicating a low level of financial risk associated with debt.
Additionally, the financial leverage ratio, which measures the extent of a company's financial leverage, has shown a declining trend from 5.70 in 2020 to 3.69 in 2024. This indicates that Olin Corporation has been reducing its reliance on debt financing over the years, which is a positive sign for the company's financial stability.
Overall, Olin Corporation's solvency ratios reflect a conservative approach towards managing its debt levels and financial leverage, positioning the company well to weather economic uncertainties and meet its financial obligations effectively.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 1.77 | 0.24 | 12.65 | 4.98 | -2.49 |
Interest coverage ratio measures a company's ability to meet its interest obligations with its operating income. A higher ratio indicates a stronger ability to cover interest expenses.
In 2020, Olin Corporation had an interest coverage ratio of -2.49, indicating that the company's operating income was insufficient to cover its interest expenses, raising concerns about its financial health.
By 2021, Olin Corporation significantly improved its interest coverage ratio to 4.98, showing a better ability to meet interest payments. This improvement suggests enhanced financial stability and reduced risk of default.
In 2022, the interest coverage ratio surged to 12.65, signaling a substantial increase in Olin Corporation's ability to cover interest expenses comfortably. This enhanced ratio reflects a strong financial position and improved profitability.
However, in 2023, the interest coverage ratio dropped to 0.24, falling significantly from the previous year. This sharp decline raises concerns about the company's ability to meet interest obligations efficiently.
By 2024, Olin Corporation managed to improve its interest coverage ratio to 1.77, indicating a slight recovery in its ability to cover interest expenses. Despite the increase, the ratio remains relatively low, suggesting ongoing challenges in meeting interest payments.
In conclusion, fluctuations in Olin Corporation's interest coverage ratio over the years highlight the company's varying ability to meet interest obligations. While improvements were seen in certain years, there were also periods of weakness, indicating the importance of closely monitoring the company's financial performance and debt management practices.