Tempur Sealy International Inc (TPX)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.49 |
| Debt-to-capital ratio | 0.00 | — | 0.00 | 0.00 | 0.81 |
| Debt-to-equity ratio | 0.00 | — | 0.00 | 0.00 | 4.18 |
| Financial leverage ratio | 13.66 | — | 15.13 | 6.57 | 8.52 |
The solvency ratios of Tempur Sealy International Inc provide insights into the company's ability to meet its long-term financial obligations and the extent to which it relies on debt to finance its operations.
1. Debt-to-assets ratio: This ratio indicates the proportion of total assets financed by debt. A decreasing trend over the years, from 0.50 in 2019 to 0.56 in 2023, suggests that the company has been relying less on debt to fund its assets.
2. Debt-to-capital ratio: This ratio measures the extent of a company's capital structure that is financed by debt. A fluctuating trend is observed, with an increase to 1.01 in 2022 and a subsequent decrease to 0.89 in 2023. This indicates some volatility in the company's debt and capital mix.
3. Debt-to-equity ratio: This ratio reflects the degree of leverage in a company's capital structure. The spike in the ratio to 8.16 in 2021, followed by a decline to 7.95 in 2023, indicates high reliance on debt for financing relative to equity, with a significant increase in debt usage in 2021.
4. Financial leverage ratio: This ratio provides a measure of the company's total assets relative to equity. The increasing trend from 6.57 in 2020 to 14.08 in 2023 suggests a substantial rise in leverage or debt usage to finance assets.
Overall, Tempur Sealy International Inc's solvency ratios show some fluctuations and increasing leverage over the years, indicating changes in the company's debt financing strategy and potential impacts on its financial risk and stability. Management should monitor these ratios closely to ensure a healthy balance between debt and equity financing for long-term sustainability.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 4.63 | 6.58 | 13.41 | 6.86 | 4.08 |
The interest coverage ratio for Tempur Sealy International Inc has fluctuated over the past five years. In 2023, the interest coverage ratio decreased to 4.67 from 6.61 in 2022. This indicates that the company's ability to cover its interest expenses with its operating income decreased in 2023. However, compared to 2019 and 2020, the interest coverage remains higher, suggesting that the company's ability to meet its interest obligations is still relatively strong. It is essential for investors and creditors to monitor this ratio over time to assess the company's financial stability and ability to manage its debt obligations.