Timken Company (TKR)
Solvency ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 2.15 | 2.31 | 2.35 | 2.51 | 2.53 | 2.52 | 2.47 | 2.49 | 2.54 | 2.52 | 2.47 | 2.40 | 2.25 | 2.24 | 2.26 | 2.35 | 2.34 | 2.42 | 2.60 | 2.74 |
Timken Company's solvency ratios indicate a strong financial position with consistently low debt levels relative to assets, capital, and equity. The company has maintained a debt-to-assets ratio of 0.00 throughout the reported periods, indicating that Timken's assets are primarily financed through equity rather than debt.
Similarly, the debt-to-capital and debt-to-equity ratios have consistently remained at 0.00, demonstrating Timken's ability to finance its operations without relying heavily on debt. The financial leverage ratio, which measures the proportion of debt in the company's capital structure, has shown a decreasing trend from 2.74 in March 2020 to 2.15 in December 2024. This implies that Timken has been reducing its reliance on debt over time, strengthening its solvency position.
Overall, the company's solvency ratios suggest a financially stable and conservative approach to managing its capital structure, with a focus on maintaining a healthy balance between debt and equity financing.
Coverage ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 4.97 | 4.66 | 4.88 | 5.50 | 5.95 | 6.97 | 7.66 | 8.18 | 9.11 | 9.74 | 9.92 | 9.94 | 9.46 | 9.06 | 8.88 | 7.62 | 6.94 | 7.39 | 7.02 | 7.54 |
The interest coverage ratio measures a company's ability to meet its interest obligations on its debt. A higher interest coverage ratio indicates a greater capacity to cover interest expenses with operating income.
Analyzing Timken Company's interest coverage ratio based on the provided data, we observe fluctuations in the ratio over the reporting periods. Starting from March 2020 at 7.54, the interest coverage ratio remained relatively stable around 7 to 8 until reaching its peak at 9.94 in March 2022. This peak suggests that the company had a strong ability to cover its interest payments with its operating income at that time.
However, from March 2022 onwards, we notice a downward trend in the interest coverage ratio, declining consistently to 4.97 by December 2024. This downward trend could indicate a potential decrease in the company's ability to cover its interest expenses with operating income, raising concerns about its financial health and debt service capabilities.
Overall, Timken Company's interest coverage ratio displayed fluctuations and a downward trend in recent periods, highlighting the importance of monitoring the company's financial performance and debt management closely.