Oshkosh Corporation (OSK)

Oshkosh Corp's solvency ratios indicate its ability to meet its long-term financial obligations and the extent to which it relies on debt to finance its operations.

1. Debt-to-assets ratio: This ratio shows the proportion of the company's assets financed by debt. Oshkosh Corp has maintained a relatively low debt-to-assets ratio over the past five years, ranging from 0.08 to 0.15. This suggests that the company relies less on debt to fund its operations and has a strong asset base.

2. Debt-to-capital ratio: The debt-to-capital ratio reflects the proportion of the company's capital structure that is financed by debt. Oshkosh Corp's debt-to-capital ratio has also remained relatively stable, ranging from 0.16 to 0.24. This indicates a moderate level of debt in the company's capital structure.

3. Debt-to-equity ratio: This ratio measures the company's financial leverage by comparing its total debt to its shareholders' equity. Oshkosh Corp's debt-to-equity ratio has decreased from 0.32 in 2019 to 0.21 in 2023, indicating a decreasing reliance on debt financing in relation to equity.

4. Financial leverage ratio: The financial leverage ratio shows the extent to which the company uses debt to finance its assets. Oshkosh Corp's financial leverage ratio has fluctuated over the years, with a peak in 2023 at 2.46. This suggests that the company has been increasing its reliance on debt to support its asset base.

Overall, Oshkosh Corp has maintained a conservative approach to debt financing, as indicated by the low debt-to-assets ratio and relatively stable debt-to-capital ratio. However, the increasing financial leverage ratio in recent years may indicate a growing reliance on debt, which could lead to higher financial risk if not managed effectively.

---

Coverage ratios

The interest coverage ratio of Oshkosh Corp has shown fluctuating levels over the past five years. In 2023, the interest coverage ratio improved significantly to 15.57, indicating that the company's operating income was 15.57 times its interest expenses, demonstrating a strong ability to meet its interest obligations. This improvement is a positive sign of the company's ability to generate enough earnings to cover its interest payments comfortably.

In comparison, the interest coverage ratio was lower in 2022 at 8.66, which suggests that the company's ability to cover its interest expenses was weaker compared to the following year. However, the ratio improved in 2021 to 12.19, indicating a better ability to meet its interest obligations compared to the previous year. In 2020 and 2019, the interest coverage ratios were 9.40 and 16.74, respectively, showing a moderate ability to cover interest expenses in those years.

Overall, the trend in Oshkosh Corp's interest coverage ratio indicates fluctuations, with some years demonstrating stronger ability to cover interest expenses than others. It is essential for investors and stakeholders to monitor this ratio closely to assess the company's financial health and ability to meet its debt obligations.