Regal Beloit Corporation (RRX)

Solvency ratios

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Debt-to-assets ratio	0.41	0.19	0.18	0.18	0.26
Debt-to-capital ratio	0.50	0.24	0.23	0.25	0.33
Debt-to-equity ratio	1.01	0.31	0.30	0.33	0.48
Financial leverage ratio	2.43	1.61	1.63	1.80	1.88

Regal Rexnord Corp's solvency ratios have shown a trend of fluctuation over the past five years. The debt-to-assets ratio has increased from 0.19 in Jan 1, 2022, to 0.41 in Dec 31, 2023, indicating a higher proportion of debt relative to assets. This suggests that the company is becoming more leveraged over time.

Similarly, the debt-to-capital ratio and the debt-to-equity ratio have also been on the rise, reaching 0.50 and 1.01, respectively, by the end of 2023. These ratios indicate that the company is increasingly reliant on debt to finance its operations and growth, which may pose a risk in terms of financial stability.

Furthermore, the financial leverage ratio has shown an upward trend, increasing from 1.63 in Jan 2, 2021, to 2.43 by the end of 2023. This suggests that Regal Rexnord Corp is using more debt to fund its assets, which could lead to higher financial risk and reduced flexibility in managing its capital structure.

Overall, the increasing trend in these solvency ratios signals a higher level of financial leverage for Regal Rexnord Corp, which could impact its ability to meet its debt obligations and potentially affect its long-term financial health.

Coverage ratios

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Interest coverage	0.99	7.97	6.04	7.13	6.66

The interest coverage ratio of Regal Rexnord Corp has exhibited volatility over the past five years. The ratio has fluctuated between a low of 1.37 in December 2023 to a high of 8.73 in January 2, 2021. Generally, an interest coverage ratio below 1 indicates that a company is not generating enough operating income to cover its interest expenses, which can raise concerns about its financial stability.

The significant drop in the interest coverage ratio in December 2023 compared to the previous years may signal increased financial risk and decreased ability to meet interest payments comfortably. Further analysis of the company's financial performance and efficiency in generating operating income may be warranted to understand the reasons behind this decline and to assess the overall financial health of Regal Rexnord Corp.