Pilgrims Pride Corp (PPC)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 2.94 | 3.26 | 3.46 | 2.92 | 2.81 |
The solvency ratios of Pilgrim's Pride Corp. provide insights into the company's ability to meet its long-term financial obligations and the extent to which it relies on debt financing.
1. Debt-to-assets ratio: This ratio has shown a fluctuating trend over the past five years, ranging from 0.32 to 0.37. The ratio decreased from 0.34 in 2019 to 0.32 in 2020 but then increased slightly in subsequent years. The decreasing trend until 2020 indicates a lower proportion of assets financed by debt, while the subsequent increase may suggest an increased reliance on debt financing for asset acquisition.
2. Debt-to-capital ratio: This ratio has also varied over the years, ranging from 0.48 to 0.56. The ratio increased from 0.49 in 2019 to 0.56 in 2021 before slightly decreasing in 2023. The rising trend indicates a higher proportion of capital financed by debt, which may raise concerns about the company's financial stability and leverage.
3. Debt-to-equity ratio: Pilgrim's Pride Corp.'s debt-to-equity ratio has demonstrated an upward trajectory over the past five years, increasing from 0.93 in 2020 to 1.28 in 2021. This indicates a higher reliance on debt compared to equity for financing the company's operations and investments. The trend suggests that the company may be more leveraged and potentially riskier in terms of financial health.
4. Financial leverage ratio: This ratio shows the company's financial leverage and has fluctuated between 2.81 and 3.46 over the years. The ratio peaked in 2021 at 3.46, indicating a significant level of financial leverage, before decreasing to 2.94 in 2023. A higher financial leverage ratio implies a higher proportion of debt in the company's capital structure, potentially increasing financial risk and volatility.
Overall, the solvency ratios of Pilgrim's Pride Corp. indicate varying levels of debt usage and financial leverage over the years, with some ratios showing an increasing trend. Investors and stakeholders should closely monitor these ratios to assess the company's ability to manage its debt and maintain solvency in the long term.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 2.80 | 7.71 | 1.63 | 2.28 | 5.65 |
The interest coverage ratio measures a company's ability to cover its interest expenses with its operating income. A higher ratio indicates a stronger ability to meet interest obligations.
Pilgrim`s Pride Corp.'s interest coverage ratio has fluctuated significantly over the past five years. In 2023, the interest coverage ratio was 3.40, lower than the previous year's ratio of 8.40, indicating a decrease in the company's ability to cover its interest expenses. This could signal potential financial strain or increased leverage.
The company's interest coverage ratio was relatively low in 2021 at 1.55, but improved in the following years. In 2020 and 2019, the ratios were 2.07 and 5.83 respectively, which suggests better performance in meeting interest payments during those years.
Overall, Pilgrim`s Pride Corp. may need to closely monitor and manage its interest expenses to ensure it can comfortably cover its obligations and maintain financial stability in the future.