Sensient Technologies Corporation (SXT)

Sensient Technologies Corp.'s solvency ratios provide insights into the company's ability to meet its long-term financial obligations and manage debt effectively.

1. Debt-to-assets ratio: This ratio remained relatively stable over the past five years, ranging from 0.29 to 0.36. A lower debt-to-assets ratio indicates a lower level of financial risk and suggests that Sensient's assets are primarily financed by equity rather than debt.

2. Debt-to-capital ratio: This ratio ranged from 0.35 to 0.41 indicating a moderate level of debt in Sensient's capital structure. It shows the proportion of the company's capital that is financed by debt. A decreasing trend in this ratio may indicate a more conservative approach to capital structure.

3. Debt-to-equity ratio: Sensient's debt-to-equity ratio fluctuated between 0.55 and 0.70 over the past five years. A lower ratio signifies less reliance on debt financing relative to equity. The decreasing trend in this ratio from 2020 to 2021 suggests a reduction in financial risk.

4. Financial leverage ratio: This ratio, which indicates the proportion of a company's assets that are financed by debt, ranged from 1.86 to 1.98. A higher financial leverage ratio suggests a higher level of financial risk due to increased dependence on debt financing. The ratio remained relatively stable over the years, reflecting consistent financial leverage.

In summary, Sensient Technologies Corp. has maintained a prudent level of debt relative to its assets, capital, and equity over the years. The financial leverage ratio has also been steady, indicating a consistent approach to managing its leverage. These solvency ratios collectively suggest a relatively stable and sustainable financial position for the company.

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Coverage ratios

The interest coverage ratio for Sensient Technologies Corp. has fluctuated over the last five years, indicating varying levels of ability to cover interest expenses with operating income.

In 2023, the interest coverage ratio was 6.16, representing a decrease from the previous year. This suggests that Sensient Technologies Corp. may have had a lower capacity to cover its interest expenses from its operating income in 2023 compared to 2022. Despite the decrease, a ratio of 6.16 still indicates that the company generated sufficient operating income to cover its interest obligations.

In 2022 and 2021, the interest coverage ratios were relatively high at 13.53 and 13.55 respectively, demonstrating a strong ability to cover interest expenses with operating income during those years. This indicates a comfortable financial position for the company in terms of servicing its debt.

In 2020, the interest coverage ratio was 10.31, showing a slight decrease from the previous year but still reflecting a good ability to meet interest payments with operating income.

In 2019, the interest coverage ratio was 6.02, suggesting a lower capacity to cover interest expenses compared to the following years. This may indicate a relatively weaker financial position in terms of servicing debt obligations in 2019.

Overall, the trend in Sensient Technologies Corp.'s interest coverage ratio shows some variability, but the company generally maintained a healthy ability to cover its interest expenses with operating income over the five-year period.