Otter Tail Corporation (OTTR)

Solvency ratios

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Debt-to-assets ratio	0.26	0.25	0.28	0.27	0.24
Debt-to-capital ratio	0.36	0.36	0.40	0.43	0.42
Debt-to-equity ratio	0.57	0.57	0.68	0.74	0.72
Financial leverage ratio	2.19	2.25	2.38	2.78	2.96

Otter Tail Corporation's solvency ratios show a mixed trend over the past five years. The Debt-to-assets ratio has increased from 0.24 in 2020 to 0.26 in 2024, indicating a slight increase in the proportion of debt to total assets. The Debt-to-capital ratio has fluctuated, reaching a peak of 0.43 in 2021 and then decreasing to 0.36 by the end of 2024.

The Debt-to-equity ratio has shown a declining trend from 0.72 in 2020 to 0.57 in 2024, signifying a decrease in the proportion of debt relative to equity over the years. The Financial leverage ratio has also decreased steadily from 2.96 in 2020 to 2.19 in 2024, showing a decrease in financial risk and reliance on debt financing.

Overall, the company's solvency position has improved in terms of lower debt levels relative to equity and assets over the years, which could indicate a more stable financial position and reduced risk of default. However, the slight increase in the Debt-to-assets ratio in recent years is worth monitoring for potential impacts on the company's financial health.

Coverage ratios

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Interest coverage	9.09	10.65	10.93	6.63	4.37

Otter Tail Corporation's interest coverage has shown a positive trend over the years, reflecting the company's improving ability to meet its interest obligations from its operating income. The interest coverage ratio increased from 4.37 in December 2020 to 6.63 in December 2021, indicating a stronger ability to cover interest expenses. This trend continued with further improvements to 10.93 in December 2022, 10.65 in December 2023, and 9.09 in December 2024.

The increasing trend in interest coverage suggests that Otter Tail Corporation has been effectively managing its interest expenses and generating sufficient earnings to comfortably cover its interest payments. A higher interest coverage ratio signifies lower financial risk for the company, as it indicates that the company has more income available to meet its interest obligations. Overall, the consistent improvement in interest coverage is a positive indicator of Otter Tail Corporation's financial health and stability.