RPM International Inc (RPM)

The solvency ratios for RPM International Inc. over the period from May 31, 2021, to May 31, 2025, indicate a consistently conservative debt profile, with distinctive trends across different measures.

The debt-to-assets ratio, debt-to-capital ratio, and debt-to-equity ratio all remain at zero throughout the observed period. This uniformity suggests that RPM International Inc. has maintained a debt-free capital structure, relying primarily on equity financing and internal funds rather than leverage. Such a stance minimizes financial risk related to indebtedness and indicates strong solvency from a debt perspective.

In contrast, the financial leverage ratio exhibits a significant decline over the period, decreasing from 3.59 in May 2021 to 2.62 in May 2024, with a slight uptick to 2.69 in May 2025. This ratio, which reflects the extent to which a company's assets are financed through debt relative to equity, suggests that RPM initially employed considerable leverage but progressively reduced it, or alternatively, improved its equity base, thereby lowering its financial leverage. The overall downward trend indicates a move towards a more conservative capital structure, reducing financial risk and enhancing long-term solvency.

In summary, RPM International Inc. demonstrates a historically debt-free position as indicated by the zero ratios, with a decreasing financial leverage ratio over the analyzed period, signifying enhanced solvency and a lower reliance on debt financing.

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Coverage ratios

The interest coverage ratio for RPM International Inc. has exhibited fluctuations over the analyzed period from May 31, 2021, to May 31, 2025. In May 2021, the ratio stood at 8.83, indicating that the company's earnings before interest and taxes (EBIT) were approximately 8.83 times its interest expenses, signifying a strong ability to meet interest obligations. By May 2022, the ratio declined to 7.90, reflecting a slight reduction in coverage but still maintaining a comfortable margin. The most notable decrease occurred by May 2023, with the ratio dropping to 6.46, which suggests a relative weakening in RPM's capacity to cover interest expenses, potentially due to increased interest costs or decreased earnings.

Subsequently, the ratio improved to 7.68 by May 2024, indicating a recovery in interest coverage, possibly through increased earnings or reduced interest expenses. The upward trend continued with a projected ratio of 9.21 for May 2025, which indicates a robust capacity to service interest liabilities, surpassing historical levels. Overall, despite some periods of decline, RPM International Inc. has maintained an interest coverage ratio that generally indicates a healthy financial position with the capacity to comfortably meet its interest obligations, particularly in the most recent forecasted year.