Universal Corporation (UVV)
Solvency ratios
| Mar 31, 2025 | Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | |
|---|---|---|---|---|---|
| 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 | 2.05 | 2.04 | 1.89 | 1.93 | 1.79 |
Universal Corporation has consistently maintained a strong solvency position, as indicated by its debt-related ratios. The Debt-to-assets ratio, Debt-to-capital ratio, and Debt-to-equity ratio have all remained at 0.00 over the past five years, signaling that the company operates with minimal debt relative to its assets, capital, and equity.
The Financial leverage ratio, on the other hand, has shown a slight increasing trend over the same period, rising from 1.79 in March 31, 2021, to 2.05 in March 31, 2025. This suggests that the company's reliance on debt to finance its operations has modestly increased over time.
Overall, Universal Corporation's solvency ratios reflect a conservative financing strategy with limited debt exposure, which is a positive indicator of the company's financial stability and ability to meet its obligations in the long term.
Coverage ratios
| Mar 31, 2025 | Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | |
|---|---|---|---|---|---|
| Interest coverage | 2.77 | 3.48 | 3.91 | 5.84 | 5.76 |
Based on the data provided, Universal Corporation's interest coverage has shown a downward trend over the years. The interest coverage ratio indicates the company's ability to meet its interest obligations with its earnings before interest and taxes (EBIT). In March 2021 and 2022, the interest coverage ratio was relatively healthy at 5.76 and 5.84 respectively, indicating that the company generated earnings multiple times higher than its interest expense.
However, there has been a concerning decline in the interest coverage ratio in subsequent years. By March 2025, the interest coverage ratio had dropped to 2.77, signaling that the company's ability to cover its interest payments with its operating income had weakened significantly. A decreasing trend in the interest coverage ratio could raise concerns for investors and creditors about Universal Corporation's financial health and ability to service its debt obligations.
It is essential for Universal Corporation to closely monitor its interest coverage ratio and take proactive measures to improve its financial performance and strengthen its ability to meet interest commitments in the future.