Polaris Industries Inc (PII)

Polaris Inc's solvency ratios indicate its ability to meet its long-term financial obligations and manage its debt levels effectively.

The debt-to-assets ratio has shown a fluctuating trend over the past five years, ranging from 0.31 to 0.39, with the ratio decreasing in 2020 and 2023. This ratio suggests that on average, 35% to 39% of Polaris' assets are financed by debt.

The debt-to-capital ratio, which represents the proportion of capital contributed by debt, has also varied but generally decreased from 0.56 in 2020 to 0.57 in 2023. This indicates that debt accounts for approximately 57% to 65% of Polaris' total capital structure.

The debt-to-equity ratio reflects the level of financial leverage used by the company. Polaris' debt-to-equity ratio has shown some fluctuations, with the ratio ranging from 1.25 to 1.85 over the five-year period. A higher ratio implies higher financial risk, as it indicates that a larger portion of assets is financed through debt rather than equity.

Finally, the financial leverage ratio, which measures the company's ability to meet its financial obligations, has also been somewhat volatile, with values ranging from 3.86 to 4.69. A higher financial leverage ratio indicates that a company is using more debt to finance its operations.

Overall, Polaris Inc's solvency ratios suggest that the company has been managing its debt levels reasonably well, with some fluctuations in leverage and debt-to-equity ratios over the years. These ratios should be monitored closely to ensure the company's long-term financial stability and ability to meet its obligations.

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Coverage ratios

Interest coverage is a financial ratio that indicates a company's ability to meet its interest obligations with its operating income. Polaris Inc's interest coverage has shown fluctuations over the past five years, ranging from a low of 5.61 in 2023 to a high of 16.04 in 2021. Generally, a higher interest coverage ratio is considered more favorable as it suggests that the company is generating more than enough operating income to cover its interest expenses.

The decreasing trend in the interest coverage ratio from 2021 to 2023 may indicate a potential decrease in the company's ability to meet its interest obligations with its operating income. However, it is important to consider other factors and analyze the company's overall financial health before drawing definitive conclusions. Further investigation into the reasons behind the fluctuations in the interest coverage ratio, such as changes in operating income or interest expenses, would provide more insight into Polaris Inc's financial performance and stability.