Stepan Company (SCL)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 1.97 | 1.94 | 2.09 | 1.92 | 1.78 |
Stepan Company's solvency ratios indicate a strong financial position with consistently low levels of debt compared to its assets, capital, and equity. The Debt-to-assets ratio, Debt-to-capital ratio, and Debt-to-equity ratio have all been reported as 0.00 for the years ending December 31, 2020 to December 31, 2024. This suggests that the company has no significant debt obligations in relation to its total assets, capital, or equity during this period.
However, the Financial leverage ratio has shown some fluctuations over the same period, ranging from 1.78 to 2.09. Despite these variations, the ratio remains relatively low, indicating that the company's level of debt is moderate relative to its equity.
Overall, based on the solvency ratios provided, Stepan Company appears to have a conservative approach to debt management, maintaining a strong financial position and low debt levels relative to its assets, capital, and equity, which bodes well for its long-term financial stability and ability to meet its obligations.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 4.11 | 4.03 | 21.34 | 24.89 | 20.30 |
The interest coverage ratio for Stepan Company has shown a generally positive trend over the past five years. Starting at a strong level of 20.30 in December 2020, the ratio improved to 24.89 by December 2021 before slightly decreasing to 21.34 by December 2022. However, the ratio experienced a significant decline in December 2023, dropping to a concerning level of 4.03. This decline continued into December 2024, with the interest coverage ratio remaining low at 4.11.
The notable dip in the interest coverage ratio in 2023 and 2024 raises potential concerns about Stepan Company's ability to cover its interest obligations with its operating income. Further analysis and monitoring of the company's financial performance and debt management practices would be advisable to address this decline in interest coverage.