Post Holdings Inc (POST)

Post Holdings Inc's solvency ratios reflect its ability to meet its financial obligations over the long term and provide insight into the company's capital structure and financial risk. Looking at the trends over the past five years:

1. Debt-to-assets ratio has ranged between 0.52 and 0.57, indicating that, on average, approximately 52% to 57% of Post Holdings Inc's assets have been financed by debt. This ratio has remained relatively stable, suggesting consistent management of asset financing.

2. Debt-to-capital ratio has varied between 0.61 and 0.71, indicating the proportion of Post Holdings Inc's capital that is financed through debt. This ratio has fluctuated slightly but has generally been within a manageable range, with the company relying more on debt financing compared to equity.

3. Debt-to-equity ratio has shown more significant fluctuations, ranging from 1.57 to 2.44. This ratio reveals the level of financial leverage used by Post Holdings Inc and the proportion of equity and debt in the company's capital structure. The increasing trend indicates a higher reliance on debt to finance operations.

4. Financial leverage ratio has fluctuated between 3.03 and 4.53, demonstrating the proportion of Post Holdings Inc's total assets that are financed by debt. A higher ratio indicates higher financial leverage and greater financial risk. The decreasing trend in recent years suggests a reduction in reliance on debt financing.

Overall, Post Holdings Inc's solvency ratios indicate a reasonably stable capital structure over the years, with a gradual increase in reliance on debt financing. However, the decreasing financial leverage ratio may suggest a shift towards a more conservative approach to debt management in recent years. It is essential for investors and stakeholders to monitor these ratios to assess the company's long-term financial health and risk levels.

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Coverage ratios

The interest coverage ratio for Post Holdings Inc has displayed fluctuating trend over the past five years. In 2024, the interest coverage was 2.49, indicating that the company generated operating income 2.49 times its interest expenses for that year. This was a slight increase from the previous year's ratio of 2.44.

Comparing it to 2022 where the interest coverage was 3.65, the company had a stronger ability to cover its interest expenses with operating income. However, the ratio decreased in 2021 to 1.68, reflecting a potential strain on the company's ability to cover interest payments. The lowest ratio was observed in 2020 at 0.94, suggesting a significant decrease in operating income relative to interest expenses.

Overall, while the interest coverage ratio has shown some variability, it is essential for Post Holdings Inc to ensure a consistent and healthy level of coverage to meet its interest obligations without facing financial stress or default risks.