PPG Industries Inc (PPG)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.27 | 0.31 | 0.31 | 0.26 | 0.26 |
| Debt-to-capital ratio | 0.42 | 0.50 | 0.51 | 0.48 | 0.46 |
| Debt-to-equity ratio | 0.73 | 0.99 | 1.05 | 0.91 | 0.86 |
| Financial leverage ratio | 2.76 | 3.15 | 3.40 | 3.44 | 3.35 |
The solvency ratios of PPG Industries, Inc. reflect the company's ability to meet its long-term financial obligations and indicate the extent to which the company relies on debt to finance its operations.
1. Debt-to-assets ratio: This ratio measures the proportion of total assets financed by debt. PPG Industries, Inc. has shown a decreasing trend in this ratio from 0.33 in 2022 to 0.28 in 2023, indicating a more conservative approach in using debt to fund its assets.
2. Debt-to-capital ratio: The debt-to-capital ratio shows the percentage of a company's capital that is financed by debt. PPG Industries, Inc. has also shown a decreasing trend in this ratio, from 0.51 in 2022 to 0.44 in 2023, suggesting a lower reliance on debt capital compared to the previous year.
3. Debt-to-equity ratio: This ratio compares a company's total debt to its total equity, indicating the company's reliance on debt financing relative to shareholder equity. PPG Industries, Inc. has experienced fluctuations in this ratio over the years, with a notable decrease from 1.03 in 2022 to 0.77 in 2023, signaling a lower level of debt relative to equity in the company's capital structure.
4. Financial leverage ratio: The financial leverage ratio measures the company's total assets relative to its equity, indicating the proportion of assets funded by equity versus debt. PPG Industries, Inc. has shown a decreasing trend in this ratio, from 3.15 in 2022 to 2.76 in 2023, signifying a reduction in the company's financial leverage and potentially lower financial risk.
Overall, the solvency ratios of PPG Industries, Inc. demonstrate a positive trend towards a more balanced capital structure with a decreasing reliance on debt financing, which may enhance the company's financial stability and long-term solvency.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 7.92 | 9.09 | 15.98 | 10.78 | 13.39 |
PPG Industries, Inc.'s interest coverage has shown some variability over the past five years. The company's interest coverage ratio was highest in 2023 at 21.67, indicating that the company generated more than sufficient operating income to cover its interest expenses. This improvement suggests the company's ability to meet its interest obligations with ease in the most recent year.
In 2022, the interest coverage ratio was 15.44, which represents a slight decline from the previous year. Although the ratio indicates that the company still had an adequate operating income to cover its interest expenses, it was relatively lower compared to 2023.
In 2021 and 2019, PPG Industries, Inc. also demonstrated strong interest coverage ratios of 18.52 and 19.65, respectively. These ratios suggest that the company had a healthy capacity to meet its interest obligations in those years.
However, in 2020, the interest coverage ratio dipped to 15.61, signaling a temporary weakening in the company's ability to cover its interest expenses with its operating income.
Overall, PPG Industries, Inc.'s interest coverage has generally been strong over the past five years, with occasional fluctuations. A higher interest coverage ratio indicates the company's better ability to service its debt and suggests strong financial health.