Stepan Company (SCL)
Solvency ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 1.97 | 1.98 | 1.97 | 1.95 | 1.94 | 1.94 | 2.00 | 2.06 | 2.09 | 2.07 | 2.03 | 2.04 | 1.92 | 1.85 | 1.80 | 1.82 | 1.78 | 1.72 | 1.72 | 1.74 |
Based on the provided data for Stepan Company, the solvency ratios indicate a strong financial position with regards to debt management and leverage.
1. Debt-to-assets ratio: Stepan Company consistently maintains a debt-to-assets ratio of 0.00 across all periods, indicating that the company has no debt in relation to its total assets. This suggests a conservative approach to financing operations.
2. Debt-to-capital ratio: Similar to the debt-to-assets ratio, the debt-to-capital ratio remains at 0.00 throughout the periods analyzed. This confirms that Stepan Company relies more on equity financing rather than debt to fund its operations.
3. Debt-to-equity ratio: With a consistent debt-to-equity ratio of 0.00 over the periods, Stepan Company demonstrates a low level of financial leverage and a healthy balance between debt and equity in its capital structure.
4. Financial leverage ratio: The financial leverage ratio shows a slight increase over the years, starting at 1.74 in March 2020 and reaching 1.97 by December 2024. While there is a gradual increase in leverage, the ratio remains relatively low, indicating that the company's assets are primarily financed by equity rather than debt.
In conclusion, Stepan Company's solvency ratios reflect a prudent financial strategy that emphasizes equity financing and maintains minimal debt levels, contributing to the company's overall strong solvency and financial stability.
Coverage ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 22.46 | 11.84 | 13.33 | 7.68 | 6.00 | 6.25 | 9.26 | 16.18 | 21.34 | 23.04 | 23.03 | 23.62 | 24.89 | 30.61 | 29.94 | 29.42 | 28.45 | 28.38 | 27.86 | 24.58 |
The interest coverage ratio of Stepan Company has shown a fluctuating trend over the periods reported. The interest coverage ratio measures the company's ability to cover its interest expenses with its operating income. A higher ratio indicates a greater ability to meet interest obligations.
From March 31, 2020, to June 30, 2021, the interest coverage ratio consistently increased from 24.58 to 29.94, reflecting a strengthening ability to cover interest payments with operating income. This upward trend indicated improved financial stability and a lower risk of default due to insufficient cash flows.
However, starting from September 30, 2021, the interest coverage ratio began to decline, reaching its lowest point of 6.00 on December 31, 2023. This significant decrease may suggest increased financial risk, as the company's operating income may no longer be sufficient to cover interest expenses comfortably.
Subsequently, there was a slight improvement in the interest coverage ratio by March 31, 2024, and a more noticeable increase to 22.46 by December 31, 2024. This improvement indicates a better ability to meet interest obligations compared to the previous periods, although it remains below the levels seen in the earlier reporting periods.
Overall, the fluctuating trend in Stepan Company's interest coverage ratio suggests variability in its financial health and ability to manage debt obligations. Investors and creditors may closely monitor this ratio to assess the company's risk profile and financial stability.