Phibro Animal Health Corporation (PAHC)

The solvency ratios of Phibro Animal Health Corporation demonstrate the company's ability to meet its long-term financial obligations.

1. Debt-to-assets ratio:
- Phibro Animal Health Corporation's debt-to-assets ratio has shown a decreasing trend over the past five years, indicating a positive sign as it decreased from 0.47 in 2020 to 0.29 in 2024. This implies that the company has been reducing its reliance on debt to finance its assets, which can improve its financial stability.

2. Debt-to-capital ratio:
- The debt-to-capital ratio has remained relatively stable around 0.52 to 0.51 over the past three years, indicating that Phibro Animal Health Corporation has been maintaining a consistent level of debt in relation to its total capital structure. This stability suggests a balanced approach to financing the company's operations.

3. Debt-to-equity ratio:
- The debt-to-equity ratio has fluctuated over the period under review, with a significant decrease from 1.96 in 2020 to 1.10 in 2024. This indicates that the company has been reducing its reliance on equity financing relative to debt, which can lower financial risk and enhance shareholder equity.

4. Financial leverage ratio:
- The financial leverage ratio has shown some variability but has generally remained above 3.0 over the past five years. The decreasing trend from 4.17 in 2020 to 3.83 in 2024 suggests that Phibro Animal Health Corporation has been reducing its leverage, which can indicate a lower financial risk and improved solvency.

Overall, the solvency ratios of Phibro Animal Health Corporation reflect a positive trend of decreasing leverage and lower reliance on debt financing, which may contribute to the company's long-term financial stability and ability to meet its financial obligations.

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Coverage ratios

Phibro Animal Health Corporation's interest coverage ratio has shown significant variability over the past five years. The interest coverage ratio measures a company's ability to meet its interest obligations with its earnings before interest and taxes (EBIT). A higher ratio indicates a strong ability to cover interest expenses, while a lower ratio suggests a potential inability to meet interest obligations.

In the most recent fiscal year ending on June 30, 2024, Phibro Animal Health Corporation reported a robust interest coverage ratio of 51.26, indicating a substantial cushion to cover interest payments. This represents a significant improvement compared to the previous year's ratio of 3.90, reflecting a more secure financial position.

Looking back further, the interest coverage ratio for the fiscal years ending on June 30, 2022, 2021, and 2020 were 6.70, 5.85, and 4.80, respectively. These ratios demonstrate a generally consistent ability to cover interest expenses in those years, although there was a slight decline in 2021 and 2020 compared to 2022.

Overall, Phibro Animal Health Corporation's interest coverage ratio has exhibited variability, with a strong improvement in the most recent year. Investors and creditors may view the company more favorably due to its enhanced ability to cover interest expenses in the latest fiscal year.