Royal Gold Inc (RGLD)

The solvency ratios of Royal Gold Inc provide insights into the company's ability to meet its long-term debt obligations. Looking at the debt-to-assets ratio, we observe fluctuations over the years, with a downward trend from June 2021 to June 2022, followed by a significant increase in September 2022. This ratio measures the proportion of the company's assets financed by debt.

Examining the debt-to-capital ratio, we note a similar pattern fluctuating over time. There is a gradual decline from June 2021 to June 2022, before rising notably in September 2022. This ratio indicates the extent to which debt contributes to the company's capital structure.

Furthermore, the debt-to-equity ratio shows a comparable trend with fluctuations throughout the periods analyzed. The ratio declined steadily from June 2021 to June 2022, before experiencing a considerable increase in September 2022. This ratio reflects the proportion of debt to equity in the company's financing structure.

Lastly, the financial leverage ratio demonstrates variations in the level of leverage utilized by Royal Gold Inc over the years. The ratio remained relatively stable until September 2022, where it increased notably, indicating higher financial leverage.

Overall, by analyzing these solvency ratios, we can assess Royal Gold Inc's financial health in terms of its ability to manage debt and leverage effectively to support its operations and growth initiatives.

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Coverage ratios

Interest coverage is a key financial ratio that indicates a company's ability to meet its interest obligations on outstanding debt. It is calculated by dividing a company's earnings before interest and taxes (EBIT) by its interest expenses. A higher interest coverage ratio signifies that the company is more capable of servicing its debt.

Analyzing Royal Gold Inc's interest coverage over the past few years, we observe fluctuations in the ratio. As of December 31, 2019, the interest coverage ratio stood at 9.18, indicating that the company's earnings were 9.18 times greater than its interest expenses. This ratio remained relatively stable over the next few quarters, with values ranging between 9.06 and 20.27.

A notable increase in interest coverage occurred in the second half of 2020, reaching 28.62 by September 30, 2020, and further improving to 33.77 by the end of the year. The trend of increasing interest coverage continued into 2021, with the ratio peaking at 56.32 by March 31, 2022, indicating a strong ability to cover interest payments.

However, starting from June 30, 2022, the interest coverage ratio declined, reaching a low of 9.03 by June 30, 2023. This significant decrease may raise concerns about the company's ability to meet its interest obligations.

Subsequently, there was a slight recovery in the interest coverage ratio by the end of 2023 and throughout 2024, albeit remaining below the peak seen in the first quarter of 2022. As of December 31, 2024, the interest coverage ratio stood at 44.10, signaling an improvement compared to the previous quarters.

Overall, the trend in Royal Gold Inc's interest coverage ratio demonstrates fluctuations over the analyzed period, indicating varying levels of ability to cover interest expenses. It is essential for stakeholders to monitor this ratio closely to assess the company's financial health and debt servicing capabilities.