Treehouse Foods Inc (THS)

Treehouse Foods Inc's solvency ratios show a relatively stable trend over the past five years. The company's debt-to-assets ratio has fluctuated between 0.33 and 0.41 during this period, indicating that around 33% to 41% of the company's assets are financed by debt. This suggests that the company has maintained a moderate level of leverage in funding its operations.

Similarly, the debt-to-capital ratio has shown a consistent pattern, ranging from 0.45 to 0.54 over the years. This ratio reflects the proportion of the company's capital structure that is funded by debt, with values indicating that debt accounts for approximately 45% to 54% of Treehouse Foods Inc's total capital.

The debt-to-equity ratio has displayed more fluctuation, decreasing from 1.19 in 2020 to 0.84 in 2023. This ratio signifies the extent to which debt is used to finance the company's operations compared to shareholders' equity. A lower debt-to-equity ratio suggests a lower reliance on debt financing, which may indicate improved solvency and a reduced financial risk for the company.

Finally, the financial leverage ratio, which measures the company's total assets relative to its equity, has shown a relatively stable trend around 2.5 over the past five years. This ratio indicates the level of financial risk undertaken by the company, with higher values suggesting higher levels of debt and potential financial risk.

Overall, based on these solvency ratios, Treehouse Foods Inc appears to have maintained a reasonably balanced capital structure with a moderate level of debt financing. The decreasing trend in the debt-to-equity ratio may indicate improved financial health and decreased reliance on debt for the company's operations.

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Coverage ratios

The interest coverage ratio for Treehouse Foods Inc has shown varying trends over the past five years. The ratio stood at 4.39 at the end of 2023, signifying an improvement in the company's ability to cover its interest expenses from its earnings. This indicates that the company's operating income is sufficient to cover its interest payments, which is a positive sign of financial health.

In contrast, the interest coverage ratio was considerably lower at 0.76 at the end of 2022. This suggests that the company's ability to cover its interest expenses from its operating income was limited during that period, potentially indicating financial strain.

In 2021, the interest coverage ratio was 1.49, showing a slight improvement from the previous year. This ratio further increased to 2.10 in 2020 and was 2.08 in 2019, indicating a relatively stable but moderate ability to cover interest expenses.

Overall, Treehouse Foods Inc has demonstrated fluctuations in its interest coverage ratio over the past five years. The significant increase in the interest coverage ratio in 2023 compared to the previous year is a positive indicator of the company's improving financial performance and ability to meet its interest obligations.