Sensient Technologies Corporation (SXT)

Sensient Technologies Corporation's solvency ratios reflect the company's ability to meet its long-term financial obligations.

1. Debt-to-assets ratio: This ratio remained relatively stable around 0.30 to 0.32 over the five-year period, indicating that around 30% to 32% of the company's assets were financed through debt. The slight increase in 2022 and 2023 suggests a marginally higher reliance on debt to finance assets, which could be a concern if not managed properly.

2. Debt-to-capital ratio: Sensient's debt-to-capital ratio fluctuated within a range of 0.35 to 0.39, indicating that between 35% to 39% of the company's capital structure was composed of debt. This ratio gives insight into the proportion of debt used to fund the company's operations and investments.

3. Debt-to-equity ratio: The debt-to-equity ratio varied from 0.54 to 0.63 during the five-year period. This ratio shows the extent of financial leverage in the company's capital structure, indicating that Sensient relied on debt for around 54% to 63% of its equity financing.

4. Financial leverage ratio: Sensient's financial leverage ratio ranged from 1.86 to 1.98 over the period, showing the company's ability to utilize debt to increase returns to shareholders. A higher ratio indicates a higher proportion of debt in the company's capital structure.

Overall, Sensient Technologies Corporation maintained relatively stable solvency ratios over the period, reflecting a balanced approach to financing through debt. However, the slight increases in some ratios in certain years warrant monitoring to ensure the company's long-term financial health and stability.

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Coverage ratios

The interest coverage ratio for Sensient Technologies Corporation has shown a generally positive trend over the years, indicating the company's ability to comfortably cover its interest obligations with its operating income.

In 2020, the interest coverage ratio stood at 10.31, suggesting that the company's earnings before interest and taxes were more than 10 times its interest expenses. This improved in 2021 to 13.55, demonstrating a stronger ability to meet interest payments.

However, there was a slight decline in the interest coverage ratio in 2022 to 13.53, which still remained at a healthy level. The following years saw a notable decrease in 2023 to 6.16 and a slight increase to 6.66 in 2024, indicating a relative weakening in the company's ability to cover its interest expenses.

Overall, while the interest coverage ratio has fluctuated, it generally indicates that Sensient Technologies Corporation has maintained a sound financial position with a sufficient ability to meet its interest obligations. However, the decreasing trend in recent years may warrant further monitoring to ensure sustainable financial health.