Silgan Holdings Inc (SLGN)

Solvency ratios provide insight into a company's ability to meet its long-term financial obligations. Looking at Silgan Holdings Inc.'s solvency ratios over the past five years, we can observe the following trends:

1. Debt-to-assets ratio: This ratio shows the proportion of assets financed by debt. Silgan Holdings Inc.'s debt-to-assets ratio has been relatively stable around 0.45 to 0.50 over the past five years. This indicates that approximately 45% to 50% of the company's assets are funded by debt.

2. Debt-to-capital ratio: This ratio illustrates the percentage of the company's capital structure that is funded by debt. Silgan Holdings Inc.'s debt-to-capital ratio has also shown stability, hovering between 0.64 and 0.72 during the same period. This suggests that around 64% to 72% of the company's capital comes from debt sources.

3. Debt-to-equity ratio: The debt-to-equity ratio indicates the extent to which the company's operations are financed by debt versus equity. Silgan Holdings Inc.'s debt-to-equity ratio has fluctuated, ranging from 1.81 to 2.60 over the last five years. This implies that the company's reliance on debt financing concerning equity has varied, with the highest ratio in 2020.

4. Financial leverage ratio: This ratio reflects the amount of debt used to finance a company's assets relative to its equity. Silgan Holdings Inc.'s financial leverage ratio has also displayed variability, moving between 4.03 and 5.20 over the five-year period. This indicates that the company has utilized different levels of debt to support its operations and investments.

In summary, Silgan Holdings Inc. has maintained a relatively stable level of debt in relation to its assets and capital over the past five years. However, the company's reliance on debt financing in comparison to equity has fluctuated, suggesting variations in its capital structure and debt management strategies. Investors and stakeholders may want to monitor these solvency ratios to assess Silgan's long-term financial health and risk exposure.

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Coverage ratios

Silgan Holdings Inc.'s interest coverage ratio has exhibited some fluctuations over the past five years. The interest coverage ratio measures a company's ability to cover its interest expenses with its operating income.

The trend in Silgan Holdings Inc.'s interest coverage ratio shows a general improvement from 2019 to 2022, indicating a better ability to meet interest payment obligations using operating income. However, in 2023, the interest coverage ratio decreased to 3.51, which implies a lower ability to cover interest expenses relative to the previous year.

Despite the slight decline in 2023, Silgan Holdings Inc. maintained a generally healthy interest coverage ratio above 1, demonstrating that the company's operating income continues to comfortably cover its interest costs. It is essential for stakeholders to monitor the trend in the interest coverage ratio over time to assess the company's financial stability and ability to meet its interest obligations.