Pilgrims Pride Corp (PPC)

Pilgrims Pride Corp's solvency ratios provide insight into the company's ability to meet its long-term financial obligations.

1. Debt-to-assets ratio: This ratio indicates the proportion of the company's assets financed by debt. Pilgrims Pride Corp has maintained a low debt-to-assets ratio, ranging from 0.00% to 0.34% over the past five years. This suggests that the company has a strong asset base relative to its debt obligations.

2. Debt-to-capital ratio: The debt-to-capital ratio measures the percentage of a company's capital that is contributed by debt. Pilgrims Pride Corp's debt-to-capital ratio has varied between 0.00% and 0.50% in the last five years. The increasing trend from 2020 to 2024 may indicate a higher reliance on debt financing for the company's capital needs.

3. Debt-to-equity ratio: The debt-to-equity ratio reflects the extent to which a company is financed by debt relative to equity. Pilgrims Pride Corp's debt-to-equity ratio has fluctuated between 0.00% and 1.00% over the period, with a noticeable increase in 2023 and a slight decrease in 2024. This implies that the company's debt level relative to equity has seen some volatility.

4. Financial leverage ratio: The financial leverage ratio measures the amount of debt a company uses to finance its operations compared to its equity. Pilgrims Pride Corp's financial leverage ratio has shown a declining trend, decreasing from 3.46 in 2021 to 2.51 in 2024. A decreasing trend can indicate a lower reliance on debt financing and reduced financial risk.

Overall, Pilgrims Pride Corp's solvency ratios suggest that the company has maintained a relatively conservative approach to debt management, with low debt levels compared to assets, capital, and equity. However, the fluctuating trends in some ratios highlight the importance of monitoring the company's debt structure and financial leverage over time to ensure continued financial stability.

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Coverage ratios

Based on the interest coverage ratios provided for Pilgrims Pride Corp, we can observe fluctuations over the years:

1. December 31, 2020: The interest coverage ratio was 2.28, indicating that Pilgrims Pride Corp generated operating profits 2.28 times greater than its interest expenses. This suggests a moderate ability to cover interest obligations.

2. December 31, 2021: The interest coverage ratio decreased to 1.63, reflecting a decline in the company's ability to cover interest costs compared to the previous year. A ratio below 1 indicates that operating profits were insufficient to cover interest expenses, raising concerns about the company's financial health.

3. December 31, 2022: The interest coverage ratio improved significantly to 7.71, signaling a strong ability to meet interest payments. This substantial increase indicates a positive shift in the company's financial performance and stability.

4. December 31, 2023: The interest coverage ratio slightly declined to 2.80 from the previous year, but it still remains above the industry average. The company continues to demonstrate a reasonable capacity to service its interest obligations.

5. December 31, 2024: The interest coverage ratio further improved to 9.76, showcasing a robust ability to cover interest expenses. This high ratio indicates a healthy financial position and a reduced risk of default on interest payments.

Overall, the trend in Pilgrims Pride Corp's interest coverage ratios shows variability, with fluctuations in the company's ability to cover interest expenses. The improvement in 2022 and 2024 reflects a stronger financial position, while the lower ratios in 2021 and 2023 suggest some challenges in meeting interest obligations during those periods.