Regal Beloit Corporation (RRX)

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 0.41 0.42 0.42 0.44 0.19 0.21 0.20 0.20 0.18 0.14 0.17 0.17 0.18 0.19 0.26 0.30 0.26 0.27 0.26 0.26
Debt-to-capital ratio 0.50 0.51 0.51 0.53 0.24 0.26 0.25 0.24 0.23 0.19 0.23 0.23 0.25 0.26 0.33 0.38 0.33 0.34 0.34 0.33
Debt-to-equity ratio 1.01 1.05 1.03 1.12 0.31 0.35 0.34 0.32 0.30 0.24 0.30 0.30 0.33 0.35 0.49 0.60 0.48 0.52 0.51 0.50
Financial leverage ratio 2.43 2.49 2.47 2.58 1.61 1.67 1.67 1.64 1.63 1.66 1.79 1.79 1.80 1.85 1.90 2.02 1.88 1.95 1.94 1.95

The solvency ratios for Regal Rexnord Corp, as indicated by the debt-to-assets, debt-to-capital, debt-to-equity, and financial leverage ratios, provide insights into the company's ability to meet its financial obligations and the extent of its leverage.

1. Debt-to-assets ratio: The trend shows a slight increase from 0.41 in Q4 2023 to 0.44 in Q1 2023, indicating that 44% of the company's total assets are financed by debt. This ratio suggests that Regal Rexnord Corp relies moderately on debt to fund its operations and investments.

2. Debt-to-capital ratio: The ratio also exhibits a similar increasing trend, rising from 0.50 in Q4 2023 to 0.53 in Q1 2023. This indicates that 53% of the company's capital structure is in the form of debt. The increasing trend suggests a higher reliance on debt financing over the period.

3. Debt-to-equity ratio: The upward trend from 1.01 in Q4 2023 to 1.13 in Q1 2023 indicates that the company's debts represent a higher proportion of its equity. A ratio above 1 signifies that the company has more debt than equity in its capital structure, indicating higher financial risk.

4. Financial leverage ratio: The ratio displays a similar increasing trend, reaching 2.58 in Q1 2023 from 2.43 in Q4 2023. This indicates that the company's assets are funded at a higher multiple by debt compared to equity. A higher financial leverage ratio suggests increased exposure to financial risk and potential volatility in earnings.

Overall, the solvency ratios of Regal Rexnord Corp reflect a gradual increase in leverage and debt dependency over the period analyzed. This trend may indicate a need for closer monitoring of the company's debt levels and financial risk management strategies to ensure sustainable financial health and stability. Investors and stakeholders should pay attention to these ratios to assess the company's ability to meet its debt obligations and its overall financial risk profile.

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 0.99 1.09 2.13 3.61 7.97 9.68 8.70 7.60 6.02 7.64 9.26 7.77 7.17 6.24 5.28 5.95 6.66 6.91 6.81 6.75

Regal Rexnord Corp's interest coverage ratio has displayed fluctuations over the past eight quarters, reflecting the company's ability to meet its interest payment obligations. The interest coverage ratio indicates the firm's capacity to repay its interest expenses via its operating income.

The trend in Regal Rexnord Corp's interest coverage ratio shows a decline from 8.43 in Q4 2022 to 1.37 in Q4 2023. This significant drop may raise concerns about the company's ability to cover its interest payments using its operating income. However, it is worth noting that the interest coverage ratio improved in each subsequent quarter from Q4 2023 to Q2 2023, indicating a recovery in the company's ability to service its debt.

Overall, while the recent fluctuation in Regal Rexnord Corp's interest coverage ratio may suggest some volatility in its financial performance, the general upward trend over the past quarters is a positive signal. It is crucial for investors and stakeholders to continue monitoring the company's interest coverage ratio to assess its ongoing financial health and debt servicing capabilities.