Scotts Miracle-Gro Company (SMG)
Solvency ratios
| 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 | Dec 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.76 | 0.70 | 0.70 | 0.80 | 0.75 | 0.59 | 0.63 | 0.70 | 0.66 | 0.63 | 0.54 | 0.59 | 0.47 | 0.46 | 0.47 | 0.49 | 0.43 | 0.39 | 0.51 | 0.57 |
| Debt-to-capital ratio | 1.22 | 1.06 | 1.10 | 1.15 | 1.12 | 0.95 | 0.96 | 0.98 | 0.95 | 0.88 | 0.77 | 0.79 | 0.69 | 0.66 | 0.71 | 0.75 | 0.68 | 0.60 | 0.73 | 0.76 |
| Debt-to-equity ratio | — | — | — | — | — | 19.50 | 22.82 | 53.61 | 19.13 | 7.55 | 3.44 | 3.71 | 2.21 | 1.90 | 2.47 | 2.94 | 2.09 | 1.52 | 2.68 | 3.15 |
| Financial leverage ratio | — | — | — | — | — | 33.04 | 36.28 | 76.20 | 29.09 | 11.94 | 6.37 | 6.30 | 4.74 | 4.12 | 5.24 | 5.95 | 4.85 | 3.88 | 5.24 | 5.53 |
The solvency ratios of Scotts Miracle-Gro Company indicate its ability to meet its long-term financial obligations and manage its debt levels.
The debt-to-assets ratio has shown some fluctuation over the periods analyzed, ranging from 0.39 to 0.80. This ratio measures the proportion of the company's assets financed by debt, with a higher ratio indicating a higher level of debt relative to assets. Scotts Miracle-Gro's debt-to-assets ratio has generally been within a reasonable range, suggesting a balanced mix of debt and assets.
The debt-to-capital ratio has also displayed variability, ranging from 0.60 to 1.22. This ratio indicates the percentage of the company's capital that is financed by debt, with a higher ratio indicating higher leverage. Scotts Miracle-Gro's debt-to-capital ratio has been relatively stable over time, reflecting prudent capital structure management.
The debt-to-equity ratio and financial leverage ratio, which provide further insight into the company's debt levels and financial risk, have also shown fluctuation. The debt-to-equity ratio has varied from 1.52 to 53.61, while the financial leverage ratio has ranged from 3.88 to 76.20. These ratios indicate the extent of the company's reliance on debt funding and its financial leverage.
Overall, Scotts Miracle-Gro Company appears to maintain a moderate level of debt relative to its assets and capital structure. The company's solvency ratios suggest a balanced approach to managing its debt levels and financial risk, which is essential for maintaining long-term financial stability.
Coverage ratios
| 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 | Dec 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 1.31 | 0.05 | -0.66 | -1.01 | -0.98 | 0.03 | -3.94 | -3.22 | -3.72 | -2.33 | 6.51 | 7.64 | 9.52 | 11.01 | 10.76 | 9.44 | 7.42 | 6.07 | 5.72 | 7.35 |
The interest coverage ratio measures a company's ability to pay interest expenses on its outstanding debt. A higher ratio indicates that the company is more capable of meeting its interest obligations.
For Scotts Miracle-Gro Company, we observe significant fluctuations in the interest coverage ratio over the specified period. The ratio was consistently below 1 for several quarters, indicating potential challenges in servicing its interest payments with its earnings. This situation raises concerns about the company's financial health and its ability to handle its debt burden.
In particular, the ratios for the quarters ending in Mar 31, 2023, Dec 31, 2023, and Jun 30, 2024 were notably negative, reflecting a critical situation where the company's earnings were insufficient to cover its interest expenses.
However, there were periods of improvement, such as in the quarters ending in Dec 31, 2021, Mar 31, 2022, and Jun 30, 2022, where the interest coverage ratio significantly exceeded 1, indicating a strong ability to meet interest obligations.
Overall, based on the data presented, it is essential for Scotts Miracle-Gro Company to closely monitor its interest coverage ratio and work towards improving its financial performance to ensure its long-term sustainability and stability.