PPG Industries Inc (PPG)
Solvency ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.27 | 0.26 | 0.27 | 0.32 | 0.31 | 0.31 | 0.31 | 0.31 | 0.31 | 0.28 | 0.29 | 0.26 | 0.26 | 0.26 | 0.25 | 0.26 | 0.26 | 0.27 | 0.27 | 0.27 |
| Debt-to-capital ratio | 0.42 | 0.42 | 0.44 | 0.50 | 0.50 | 0.52 | 0.52 | 0.52 | 0.51 | 0.49 | 0.51 | 0.48 | 0.48 | 0.48 | 0.49 | 0.50 | 0.46 | 0.48 | 0.49 | 0.49 |
| Debt-to-equity ratio | 0.73 | 0.72 | 0.80 | 0.99 | 0.99 | 1.07 | 1.09 | 1.10 | 1.05 | 0.97 | 1.02 | 0.91 | 0.91 | 0.91 | 0.95 | 1.01 | 0.86 | 0.93 | 0.95 | 0.94 |
| Financial leverage ratio | 2.76 | 2.77 | 2.92 | 3.09 | 3.15 | 3.46 | 3.49 | 3.52 | 3.40 | 3.50 | 3.58 | 3.45 | 3.44 | 3.45 | 3.76 | 3.82 | 3.35 | 3.44 | 3.54 | 3.54 |
The solvency ratios of PPG Industries, Inc. indicate the company's ability to meet its long-term financial obligations and the extent of its reliance on debt financing relative to its assets, capital, and equity.
1. Debt-to-assets ratio:
- PPG Industries' debt-to-assets ratio has shown a decreasing trend from 0.33 in Q4 2022 to 0.28 in Q4 2023. This indicates that the company's reliance on debt to finance its assets has declined over the past year. A lower ratio suggests a lower risk of insolvency since a smaller portion of the company's assets is funded by debt.
2. Debt-to-capital ratio:
- The debt-to-capital ratio has also decreased gradually from 0.53 in Q1 2022 to 0.44 in Q4 2023. This trend implies that PPG Industries has been reducing its debt relative to its total capital, including both debt and equity. A lower debt-to-capital ratio signifies a stronger financial position and lower financial risk.
3. Debt-to-equity ratio:
- PPG Industries' debt-to-equity ratio has shown a declining trend from 1.15 in Q1 2022 to 0.77 in Q4 2023. This indicates that the company has progressively reduced its debt in relation to its shareholders' equity. A decreasing debt-to-equity ratio reflects a lower level of financial risk and a stronger equity base that can support the company's operations and growth.
4. Financial leverage ratio:
- The financial leverage ratio of PPG Industries has decreased from 3.52 in Q1 2022 to 2.76 in Q4 2023, showcasing a declining trend. This ratio indicates the extent to which the company relies on debt to support its operations. A lower financial leverage ratio signifies a reduced reliance on debt financing and a stronger financial position in terms of equity to support its operations and investments.
In conclusion, the improving trend in PPG Industries' solvency ratios reflects a stronger financial position with reduced reliance on debt and greater stability to meet its long-term financial obligations.
Coverage ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 7.92 | 8.58 | 8.56 | 9.28 | 9.09 | 10.24 | 11.64 | 12.52 | 15.98 | 16.26 | 16.78 | 12.24 | 10.78 | 10.99 | 10.41 | 12.54 | 13.39 | 13.32 | 13.36 | 14.72 |
The interest coverage ratio for PPG Industries, Inc. has shown a generally positive trend over the past eight quarters, indicating the company's ability to comfortably meet its interest obligations from its operating profits. The interest coverage ratio has ranged from a high of 21.67 in Q4 2023 to a low of 15.27 in Q1 2023.
The consistently high interest coverage ratios above 15 signify that PPG Industries has more than sufficient earnings to cover its interest expenses, providing a buffer against any potential downturns in profitability. This strong interest coverage indicates financial stability and a low risk of default on its debt obligations.
It is worth noting that a higher interest coverage ratio is generally preferred by lenders and investors as it implies a lower risk of financial distress. PPG Industries' consistent and strong interest coverage ratios suggest that the company is effectively managing its interest expenses and is in a healthy financial position.