UGI Corporation (UGI)

The solvency ratios of UGI Corporation indicate the company's ability to meet its financial obligations and the extent to which it is financed by debt.

1. Debt-to-assets ratio:
- The debt-to-assets ratio has been relatively stable over the five-year period, ranging from 0.37 to 0.43.
- This ratio shows that, on average, 37% to 43% of UGI's total assets are financed by debt, with the remaining financed by equity.
- The slight increase in 2024 compared to 2023 may indicate a slightly higher reliance on debt to finance assets.

2. Debt-to-capital ratio:
- The debt-to-capital ratio has also remained relatively stable over the period, fluctuating between 0.52 and 0.60.
- This metric highlights that, on average, approximately 52% to 60% of UGI's capital structure is composed of debt, with the remainder being equity.
- The consistency in this ratio suggests that UGI has maintained a balanced mix of debt and equity financing in its capital structure.

3. Debt-to-equity ratio:
- The debt-to-equity ratio has shown some fluctuations over the years, with the ratio ranging from 1.07 to 1.49.
- This ratio reflects that, on average, UGI has maintained a higher level of debt compared to equity in its capital structure, indicating a higher financial risk.
- The decrease in the ratio in 2022 compared to the previous years suggests a temporary reduction in the company's reliance on debt financing.

4. Financial leverage ratio:
- The financial leverage ratio has also exhibited variability over the period, ranging from 2.90 to 3.51.
- This metric indicates the extent to which UGI is using debt to finance its assets, with a higher ratio implying higher financial risk.
- The stability of this ratio suggests that UGI has maintained a relatively consistent level of financial leverage, although the fluctuations may warrant further scrutiny to assess the company's leverage risk.

In summary, the solvency ratios of UGI Corporation reflect a consistent but slightly fluctuating balance between debt and equity in its capital structure over the years. The company has maintained a moderate level of debt, which is important to monitor for potential impacts on its financial health and risk profile.

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Coverage ratios

The interest coverage ratio for UGI Corporation has exhibited fluctuations over the past five years. In 2024, the interest coverage ratio improved to 1.95, indicating that the company earned 1.95 times the amount needed to cover its interest expenses for the year. This signifies a better ability to meet its interest obligations compared to the previous year.

On the other hand, in 2023, the interest coverage ratio was -3.85, which implies that the company's earnings were insufficient to cover its interest expenses and may have relied on other financial resources to fulfill its interest obligations.

In 2022, the interest coverage ratio was 5.21, demonstrating a strong ability to cover interest payments comfortably. This was further enhanced in 2021 with an interest coverage ratio of 7.42, indicating a significant improvement in the company's capacity to handle interest expenses.

In 2020, the interest coverage ratio was 3.07, which, although lower than the two preceding years, still illustrated a reasonable ability to meet interest charges.

Overall, while there have been fluctuations in UGI Corporation's interest coverage ratio over the years, the company has shown varying levels of ability to cover its interest expenses, with improvements in some years and challenges in others.