Stanley Black & Decker Inc (SWK)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 2.51 | 2.61 | 2.57 | 2.43 | 2.13 |
The solvency ratios of Stanley Black & Decker Inc, specifically the Debt-to-assets, Debt-to-capital, and Debt-to-equity ratios, have consistently remained at 0.00 across the years from 2020 to 2024. This indicates that the company has not taken on any long-term debt relative to its assets, capital, or equity during this period.
However, the Financial leverage ratio has shown some fluctuation, increasing from 2.13 in 2020 to a peak of 2.61 in 2023 before decreasing to 2.51 in 2024. This ratio suggests that the company's financial leverage, or the proportion of debt in its capital structure, has slightly increased over the years, although it remains relatively stable and within a reasonable range.
Overall, the consistent low levels of debt-related ratios indicate a strong solvency position for Stanley Black & Decker Inc, as it appears to have a conservative approach to utilizing debt in its financial structure. The slight fluctuation in the financial leverage ratio should be monitored, but the company's solvency seems to be well-maintained.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 1.48 | 0.32 | 1.09 | 10.07 | 7.46 |
The interest coverage ratio for Stanley Black & Decker Inc has shown fluctuations over the five-year period from December 31, 2020, to December 31, 2024. The company's interest coverage ratio was relatively healthy at 7.46 in 2020, indicating that the company generated sufficient earnings before interest and taxes (EBIT) to cover its interest expenses 7.46 times over.
In 2021, the interest coverage improved to 10.07, indicating a stronger ability to meet interest obligations from operating earnings. This suggests that the company's financial health may have improved during that period.
However, there was a significant decline in the interest coverage ratio in 2022 to 1.09, which could raise concerns about the company's ability to cover its interest expenses with its operating income. This sharp decrease may signal a potential strain on the company's financial position.
The situation worsened in 2023 with the interest coverage ratio dropping to 0.32, well below the industry benchmark of 1. This suggests that the company may be struggling to generate enough operating income to cover its interest payments, potentially raising solvency risks.
In 2024, the interest coverage ratio improved slightly to 1.48 but still remains below ideal levels, indicating that the company may continue to face challenges in meeting its interest obligations.
Overall, the trend in Stanley Black & Decker Inc's interest coverage ratio over the period raises concerns about the company's ability to cover its interest expenses from operating earnings consistently. It would be crucial for the company to focus on improving its profitability and operational efficiency to strengthen its financial position and ensure sustainable debt servicing capabilities.