Valmont Industries Inc (VMI)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.32 | 0.24 | 0.27 | 0.25 | 0.27 |
| Debt-to-capital ratio | 0.45 | 0.36 | 0.41 | 0.38 | 0.40 |
| Debt-to-equity ratio | 0.82 | 0.55 | 0.68 | 0.62 | 0.67 |
| Financial leverage ratio | 2.57 | 2.25 | 2.49 | 2.50 | 2.45 |
Solvency ratios provide insight into a company's ability to meet its long-term financial obligations. Looking at the solvency ratios of Valmont Industries Inc over the past five years, we can observe the following trends:
1. Debt-to-assets ratio: This ratio measures the proportion of the company's assets that are financed by debt. Valmont's debt-to-assets ratio has fluctuated between 0.24 and 0.32 over the past five years, indicating that the company has maintained a relatively stable level of debt in relation to its total assets.
2. Debt-to-capital ratio: This ratio shows the percentage of the company's capital that is financed through debt. Valmont's debt-to-capital ratio has ranged from 0.36 to 0.45 during the same period, suggesting that the company has relied on debt for roughly 36% to 45% of its overall capital structure.
3. Debt-to-equity ratio: The debt-to-equity ratio compares the amount of debt to the amount of equity in the company's capital structure. Valmont's debt-to-equity ratio has varied between 0.55 and 0.82 in the last five years, indicating that the company has had differing levels of debt in relation to its equity position.
4. Financial leverage ratio: This ratio measures the extent to which a company is using debt to finance its operations. Valmont's financial leverage ratio has fluctuated between 2.25 and 2.57 over the past five years, highlighting the company's utilization of debt in its capital structure.
Overall, Valmont Industries Inc has maintained moderate levels of debt in relation to its assets, capital, equity, and leverage ratios over the past five years. The company appears to have a balanced approach to financing its operations, which is essential for long-term solvency and financial stability.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 5.24 | 9.11 | 6.73 | 5.50 | 5.68 |
The interest coverage ratio for Valmont Industries Inc has shown some variability over the past five years. In 2023, the interest coverage ratio was 5.24, which indicates that the company's operating income was able to cover its interest expense 5.24 times. This represents a decrease from the previous year's ratio of 9.11. Despite this decrease, the company's interest coverage ratio remains relatively healthy and suggests that Valmont Industries Inc is generating sufficient operating income to meet its interest obligations.
Looking back over the five-year period, the interest coverage ratio has fluctuated between 5.24 and 9.11, with the lowest ratio observed in 2023 and the highest in 2022. This variability could be influenced by fluctuations in the company's operating income and interest expense over the years.
Overall, Valmont Industries Inc's interest coverage ratio indicates that the company has been able to manage its interest obligations effectively, although there was a slight decline in coverage in 2023 compared to the previous year. It is important for investors and stakeholders to continue monitoring this ratio to ensure that the company maintains a healthy balance between its operating income and interest expenses.