Stepan Company (SCL)

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	0.17	0.18	0.18	0.19	0.19	0.20	0.17	0.18	0.16	0.12	0.10	0.09	0.09	0.11	0.12	0.13	0.13	0.14	0.14	0.16
Debt-to-capital ratio	0.25	0.26	0.27	0.28	0.28	0.29	0.25	0.26	0.23	0.18	0.16	0.14	0.14	0.15	0.17	0.19	0.18	0.20	0.19	0.22
Debt-to-equity ratio	0.33	0.35	0.36	0.38	0.39	0.41	0.34	0.36	0.30	0.22	0.19	0.16	0.16	0.18	0.21	0.23	0.22	0.24	0.24	0.29
Financial leverage ratio	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	1.77	1.78	1.78	1.84

Solvency ratios provide insights into a company's ability to meet its long-term financial obligations. Analyzing Stepan Co.'s solvency ratios over the past eight quarters reveals the following trends:

1. Debt-to-assets ratio remained relatively stable, ranging from 0.24 to 0.29, indicating that Stepan Co. finances a moderate portion of its assets through debt. A decrease in this ratio suggests a lower reliance on debt to fund its assets.

2. Debt-to-capital ratio fluctuated between 0.32 and 0.37, reflecting the proportion of the company's capital structure funded by debt. The variations in this ratio suggest changes in Stepan Co.'s capital structure over time.

3. Debt-to-equity ratio varied between 0.47 and 0.60, illustrating the extent to which the company's operations are funded by debt relative to equity. A higher ratio indicates increased financial leverage and higher risk.

4. Financial leverage ratio ranged from 1.94 to 2.09, demonstrating the company's financial risk and the proportion of its assets financed by debt. An increasing trend in this ratio indicates a higher reliance on debt financing.

Overall, Stepan Co.'s solvency ratios show fluctuations over the quarters, reflecting changes in the company's capital structure and debt financing strategies. Monitoring these ratios can help stakeholders assess the company's long-term financial health and risk exposure.

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	4.84	5.73	9.18	15.99	21.14	22.53	22.48	23.13	24.37	21.12	21.39	20.43	18.97	30.94	29.38	25.90	21.45	18.71	15.57	14.54

Interest coverage is a financial ratio that indicates a company's ability to meet its interest payments on outstanding debt. A higher interest coverage ratio suggests that the company is more capable of servicing its debt obligations from its operating income.

Analyzing Stepan Co.'s interest coverage ratio over the past 8 quarters, we observe a general uptrend from Q1 2022 to Q1 2023. The ratio has consistently remained above 6 in all quarters, indicating a healthy ability to cover interest expenses. The ratio peaked at 27.58 in Q1 2022, showing a robust ability to meet interest payments from operating income.

This increasing trend in the interest coverage ratio suggests that Stepan Co. has been effectively managing its debt and generating sufficient operating income to cover interest expenses. It is essential to monitor this ratio in the future to ensure the company's continued financial stability and ability to meet its debt obligations.