Royal Gold Inc (RGLD)

Royal Gold Inc has shown consistently strong solvency ratios in recent years.

1. Debt-to-assets ratio: The debt-to-assets ratio measures the proportion of a company's assets financed by debt. Royal Gold Inc had a very low debt-to-assets ratio of 0.00 as of June 30, 2021 and December 31, 2024, indicating that the company has little to no debt relative to its total assets. The ratio experienced slight fluctuations in other periods but remained at relatively low levels, showing the company's ability to finance its assets primarily through equity.

2. Debt-to-capital ratio: The debt-to-capital ratio reflects the proportion of a company's capital structure that is financed by debt. Royal Gold Inc also maintained a very low debt-to-capital ratio of 0.00 as of June 30, 2021 and December 31, 2024. Similar to the debt-to-assets ratio, this indicates a minimal reliance on debt for funding the company's operations and investments.

3. Debt-to-equity ratio: The debt-to-equity ratio compares a company's total debt to its shareholders' equity. Royal Gold Inc showed a debt-to-equity ratio of 0.00 as of June 30, 2021 and December 31, 2024, suggesting a healthy balance sheet with little debt relative to equity. The ratio increased slightly in December 31, 2022, and December 31, 2023, but remained at moderate levels, indicating manageable debt levels compared to equity.

4. Financial leverage ratio: The financial leverage ratio measures the extent to which a company uses debt to finance its assets. Royal Gold Inc's financial leverage ratio ranged from 1.06 to 1.29 during the period under review. While there was some fluctuation, the ratios remained relatively stable and below 2, indicating that the company's operations are not heavily reliant on debt financing.

Overall, Royal Gold Inc's solvency ratios suggest a conservative approach to capital structure management, with a focus on maintaining a strong financial position through limited debt utilization.

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Coverage ratios

The interest coverage ratio measures a company's ability to meet its interest obligations with its operating income. Royal Gold Inc's interest coverage has displayed some fluctuations over the years. As of June 30, 2020, the interest coverage ratio was 175.13, indicating a strong ability to cover interest expenses. This ratio improved significantly to 294.08 by June 30, 2021, reflecting an even stronger financial position.

However, there was a notable decline in the interest coverage ratio by December 31, 2022, where it dropped to 16.52. This decrease suggests that the company's ability to cover interest expenses decreased significantly during this period. The trend continued with a further decrease to 9.82 by December 31, 2023, indicating a potential strain on the company's ability to meet its interest obligations.

Fortunately, by December 31, 2024, the interest coverage ratio rebounded to 44.10, showing an improvement compared to the previous year and potentially signaling a healthier financial position. Overall, fluctuations in the interest coverage ratio for Royal Gold Inc suggest varying levels of financial health and ability to cover interest expenses during the analyzed period.