Thor Industries Inc (THO)
Solvency ratios
| Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | Jul 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.16 | 0.18 | 0.24 | 0.24 | 0.29 |
| Debt-to-capital ratio | 0.21 | 0.25 | 0.33 | 0.35 | 0.42 |
| Debt-to-equity ratio | 0.27 | 0.32 | 0.49 | 0.55 | 0.71 |
| Financial leverage ratio | 1.73 | 1.83 | 2.06 | 2.28 | 2.49 |
The solvency ratios of Thor Industries Inc, as reflected in the table, indicate the company's ability to meet its long-term debt obligations.
1. Debt-to-assets ratio: This ratio measures the proportion of total assets financed by debt. Thor Industries Inc has shown a decreasing trend in this ratio over the past five years, indicating a stronger asset base relative to its debt obligations.
2. Debt-to-capital ratio: This ratio assesses the proportion of total capital that is financed by debt. Similar to the debt-to-assets ratio, Thor Industries Inc has managed to decrease this ratio steadily over the years, suggesting a lower reliance on debt as a source of capital.
3. Debt-to-equity ratio: This ratio evaluates the level of financial leverage by comparing total debt to total equity. Thor Industries Inc has also demonstrated a declining trend in this ratio, indicating a reduced level of debt relative to equity, which is a positive sign for solvency.
4. Financial leverage ratio: This ratio measures the company's use of debt in its capital structure. Thor Industries Inc has shown a decreasing trend in this ratio as well, reflecting a lower level of financial leverage over time.
Overall, the decreasing trend in all of these solvency ratios indicates that Thor Industries Inc has been managing its debt levels effectively, improving its financial stability and reducing the risk of insolvency.
Coverage ratios
| Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | Jul 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 4.49 | 6.12 | 17.20 | 10.02 | 3.56 |
Thor Industries Inc's interest coverage ratio has fluctuated over the past five years. The interest coverage ratio measures the company's ability to meet its interest payments on outstanding debt with its operating income.
In Jul 2024, the interest coverage ratio was 4.49, indicating that the company's operating income was sufficient to cover its interest expenses 4.49 times over. This represents a decrease from the previous year, suggesting a potential decrease in the company's ability to cover its interest payments.
Comparing this to the peak in Jul 2022 with an interest coverage ratio of 17.20, it is evident that the company had a significantly higher ability to cover its interest expenses at that time. This high ratio indicates a strong ability to fulfill interest obligations and suggests financial stability.
The fluctuations in the interest coverage ratio over the years may indicate changes in the company's operating performance, profitability, or debt levels. Investors and analysts should closely monitor these trends to assess the company's financial health and ability to meet its debt obligations.