Valmont Industries Inc (VMI)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.22 | 0.32 | 0.24 | 0.27 | 0.25 |
| Debt-to-capital ratio | 0.32 | 0.45 | 0.36 | 0.41 | 0.38 |
| Debt-to-equity ratio | 0.47 | 0.82 | 0.55 | 0.68 | 0.62 |
| Financial leverage ratio | 2.16 | 2.57 | 2.25 | 2.49 | 2.50 |
Valmont Industries Inc's solvency ratios indicate the company's ability to meet its long-term financial obligations and the extent of its reliance on debt to fund its operations.
- The Debt-to-assets ratio has shown a slight increase from 0.25 in 2020 to 0.32 in 2023, suggesting that a higher portion of the company's assets is financed by debt. However, it decreased to 0.22 in 2024, indicating a potential improvement in the company's asset coverage by reducing its debt levels.
- The Debt-to-capital ratio has followed a similar trend, increasing from 0.38 in 2020 to 0.45 in 2023. This signifies that a larger proportion of Valmont Industries' total capital is derived from debt. The ratio then decreased to 0.32 in 2024, indicating the company may be managing its capital structure more efficiently.
- The Debt-to-equity ratio has fluctuated over the years, reaching a peak of 0.82 in 2023. This implies that the company has been relying more on debt financing relative to equity to support its business operations. However, the ratio decreased to 0.47 in 2024, indicating a reduction in the company's reliance on debt financing.
- The Financial leverage ratio, which measures the company's level of debt relative to its equity, has varied slightly from 2.16 in 2024 to 2.57 in 2023. This suggests that Valmont Industries has been adjusting its financial leverage to maintain a balance between debt and equity in its capital structure.
Overall, Valmont Industries Inc's solvency ratios show a mix of trends, indicating potential shifts in the company's financing strategies and its ability to manage debt levels effectively over the years. Investors and stakeholders may monitor these ratios to assess the company's financial health and risk exposure.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 8.93 | 5.24 | 9.11 | 6.73 | 5.50 |
To analyze Valmont Industries Inc's interest coverage based on the provided data:
1. The interest coverage ratio measures a company's ability to cover its interest expenses with its operating income. A higher ratio indicates a better ability to meet interest obligations.
2. The interest coverage ratio for Valmont Industries Inc has shown fluctuations over the years:
- As of December 31, 2020, the interest coverage ratio was 5.50, implying that the company generated operating income 5.50 times greater than its interest expenses.
- By December 31, 2021, the interest coverage ratio improved to 6.73, indicating a stronger ability to cover interest payments.
- The ratio continued to increase, reaching 9.11 by December 31, 2022, reflecting a significant improvement in Valmont's ability to meet interest obligations.
- However, by December 31, 2023, the interest coverage ratio decreased to 5.24, although still above the baseline of 1. This decline suggests a slight weakening in the company's ability to cover interest costs.
- Finally, as of December 31, 2024, the interest coverage ratio rebounded to 8.93, showing a recovery from the previous year's dip.
3. Overall, Valmont Industries Inc's interest coverage has demonstrated variability but generally remains at satisfactory levels, with the company being able to comfortably meet its interest payment obligations in most of the analyzed years. However, monitoring the trend and ensuring sustained levels above industry benchmarks will be essential for long-term financial health.