Snap-On Inc (SNA)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.16 | 0.17 | 0.17 | 0.18 | 0.17 |
| Debt-to-capital ratio | 0.19 | 0.21 | 0.22 | 0.24 | 0.22 |
| Debt-to-equity ratio | 0.23 | 0.26 | 0.28 | 0.31 | 0.28 |
| Financial leverage ratio | 1.49 | 1.56 | 1.62 | 1.71 | 1.67 |
Solvency ratios provide insights into a company's ability to meet its long-term financial obligations. Snap-On Inc's solvency ratios, as indicated in the table, show a generally improving trend over the past five years.
The Debt-to-assets ratio has remained relatively stable, indicating that Snap-On Inc has been effective in managing its debt relative to its total assets. This suggests a lower reliance on debt to fund its operations and investments.
The Debt-to-capital ratio has shown a decreasing trend, implying that the proportion of debt in Snap-On Inc's capital structure has decreased over the years. This indicates a lower financial risk and a stronger financial position.
The Debt-to-equity ratio has also displayed a declining trend, indicating that the company's reliance on debt financing compared to equity has decreased over time. This implies a lower degree of financial leverage and a healthier balance between debt and equity.
The Financial leverage ratio has decreased steadily, suggesting that Snap-On Inc has been reducing its reliance on debt to finance its operations. This indicates a stronger financial position and a lower risk of financial distress.
Overall, the improving trend in Snap-On Inc's solvency ratios suggests that the company has been managing its long-term financial obligations effectively and improving its financial stability over the years.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 27.14 | 26.06 | 21.10 | 16.11 | 19.48 |
Snap-On Inc has consistently demonstrated strong interest coverage ratios over the past five years, reflecting the company's ability to comfortably cover its interest expenses with its operating earnings. The interest coverage ratio has shown a positive trend, increasing from 19.48 in 2019 to 27.14 in 2023. This signifies a significant improvement in the company's ability to meet its interest obligations.
A high interest coverage ratio indicates that Snap-On Inc has substantial earnings relative to its interest obligations, suggesting a lower risk of default on its debt. This strong financial position enhances the company's creditworthiness and may indicate financial stability. Overall, the increasing trend in interest coverage ratios highlights Snap-On Inc's solid financial health and efficient management of its debt obligations over the years.