Pentair PLC (PNR)

Pentair PLC's solvency ratios indicate its ability to meet its long-term financial obligations. The Debt-to-assets ratio has been relatively stable over the years, decreasing from 0.20 in 2020 to 0.19 in 2021 before increasing to 0.36 in 2022, and then gradually declining to 0.25 in 2024. This suggests a generally healthy proportion of debt to assets.

The Debt-to-capital ratio, reflecting the proportion of debt in the company's capital structure, has shown a similar trend. It decreased from 0.29 in 2020 to 0.27 in 2021, spiked to 0.46 in 2022, and then decreased to 0.32 in 2024. This indicates some fluctuations in the debt relative to the total capital employed by Pentair PLC.

The Debt-to-equity ratio, which measures the extent to which the company is financed by debt compared to equity, decreased from 0.40 in 2020 to 0.37 in 2021, surged to 0.86 in 2022, and then gradually declined to 0.46 in 2024. The spike in 2022 might indicate increased reliance on debt financing during that period.

The Financial leverage ratio, indicating the company's ability to meet its financial obligations, decreased from 1.99 in 2020 to 1.96 in 2021, increased to 2.38 in 2022, and then decreased to 1.81 in 2024. This ratio reflects the company's ability to generate returns on its investments above the cost of its debts.

Overall, Pentair PLC's solvency ratios show some fluctuations but demonstrate a conservative approach to managing debt levels over the analyzed years. Investors and creditors may find these ratios useful in assessing the company's long-term financial health and risk levels.

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Coverage ratios

The interest coverage ratio for Pentair PLC has shown a positive trend over the years, reflecting the company's ability to meet its interest obligations with operating income. In 2020, the interest coverage ratio was 19.31, indicating that the company's operating income was 19.31 times higher than its interest expenses.

Subsequently, the ratio improved significantly to 50.95 in 2021 and further to 66.14 in 2022, suggesting a more robust financial position and lower financial risk. However, there was a notable decline in 2023 to 6.25, which may raise concerns about the company's ability to cover its interest expenses adequately with its operating income.

In 2024, the interest coverage ratio improved slightly to 9.07, but it still remains lower compared to the levels seen in 2021 and 2022. Overall, while the company has shown solid interest coverage in recent years, the significant drop in 2023 warrants close monitoring to ensure the company's financial health and ability to meet its debt obligations in the future.