Treehouse Foods Inc (THS)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 2.57 | 2.47 | 2.52 | 2.82 | 2.94 |
Treehouse Foods Inc demonstrates a strong solvency position as indicated by its consistently low debt-to-assets, debt-to-capital, and debt-to-equity ratios of 0.00 across the years 2020 to 2024. This signifies that the company has minimal debt in relation to its assets, capital, and equity, which is a positive indication of financial stability and lower risk of insolvency.
Additionally, the financial leverage ratio, which was 2.94 in 2020, decreased to 2.57 by the end of 2024. This downward trend suggests that the company has been effectively managing its financial leverage by reducing its reliance on debt financing over the years. Lower financial leverage ratios generally indicate a healthier financial position and less dependence on borrowed funds to finance its operations.
Overall, the consistently low debt ratios and improving financial leverage ratio demonstrate Treehouse Foods Inc's sound solvency position and effective management of debt, which is crucial for long-term financial sustainability and growth.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 1.52 | 2.11 | 1.02 | -0.20 | 1.16 |
Treehouse Foods Inc's interest coverage ratio provides insight into its ability to meet its interest payments on outstanding debt. The trend in the interest coverage ratio over the years is as follows:
1. December 31, 2020: 1.16
2. December 31, 2021: -0.20
3. December 31, 2022: 1.02
4. December 31, 2023: 2.11
5. December 31, 2024: 1.52
The interest coverage ratio is a key indicator of a company's financial health and stability. A ratio below 1 indicates that the company is not generating enough operating income to cover its interest expenses, potentially signaling financial distress. In 2021, Treehouse Foods Inc had a negative interest coverage ratio of -0.20, suggesting potential challenges in meeting its interest obligations. However, the company improved its interest coverage in the following years, reaching ratios above 1.
Overall, the trend in Treehouse Foods Inc's interest coverage ratio shows fluctuations, with significant improvement from 2021 to 2024. It is important for the company to maintain a healthy interest coverage ratio to ensure it can comfortably meet its interest payments and sustain its financial stability.