Standex International Corporation (SXI)

The solvency ratios for Standex International Corporation over the period from June 30, 2021 to June 30, 2025 consistently indicate an absence of debt financing. Specifically, the debt-to-assets ratio, debt-to-capital ratio, and debt-to-equity ratio are all recorded as zero across all the examined years, suggesting that the company maintains no long-term or short-term debt liabilities during this timeframe.

This debt-free status implies a conservative or self-financed capital structure, relying entirely on equity or internal resources for operations and growth. Such a position minimizes financial risk associated with leverage, as the company does not bear the burden of debt obligations.

On the other hand, the financial leverage ratio, which measures the extent of assets funded by shareholders' equity relative to debt, exhibits a decreasing trend from 1.90 in 2021 to a low of 1.62 in 2024, before rising sharply to 2.20 in 2025. The low and stable readings in earlier years reinforce the absence of debt, while the increase in 2025 may suggest a shift towards employing leverage, although the debt ratios do not reflect this change directly.

Overall, the company's current solvency profile historically relies solely on equity, indicating a strong solvency position with minimal or no reliance on borrowed funds. The upward movement in the financial leverage ratio in 2025 could warrant further investigation to determine if this reflects a strategic change in capital structure or other financial adjustments.

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Coverage ratios

The analysis of Standex International Corporation's interest coverage ratios over the period from June 30, 2021, to June 30, 2025, reveals notable fluctuations reflective of the company's changing ability to meet its interest obligations from its earnings before interest and taxes (EBIT).

In fiscal year 2021, the interest coverage ratio stood at 10.18, indicating a strong capacity to cover interest expenses, with earnings well exceeding interest obligations by a significant margin. This robust ratio suggests a healthy financial position in terms of debt servicing capability during that period.

The following year, 2022, the ratio increased markedly to 15.17, further enhancing the company's ability to cover its interest expenses. This improvement may indicate increased operational profitability or reduced interest costs, bolstering financial stability.

The most notable increase occurred in 2023, when the ratio surged to 30.46. Such a substantial rise signifies an exceptional improvement in EBIT relative to interest expenses, potentially driven by strong operational performance, cost control, or other favorable factors reducing interest burden or increasing earnings.

However, in 2024, the ratio decreased to 20.93, still maintaining a high level of interest coverage but indicating some diminution in EBIT relative to interest obligations compared to the previous year. This decline may warrant attention to factors affecting earnings or interest expenses in that period.

By 2025, the ratio declined sharply to 3.88, approaching a level that suggests reduced financial cushion for interest payments. While still above the generally acceptable threshold (often considered to be around 3), this significant decrease indicates a potential concern regarding the company's ability to comfortably cover interest obligations, possibly due to declining earnings, increased interest expense, or a combination thereof.

Overall, the trend shows periods of strong interest coverage, with particularly high ratios in 2022 and 2023, followed by a decline towards 2025. The pattern suggests variability in profitability and a potential upward or downward shift in financial stability relative to interest obligations, with the most recent ratio nearing a lower threshold of safety.