Vontier Corp (VNT)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.49 | 0.51 | 0.60 | 0.59 | 0.58 |
| Debt-to-capital ratio | 0.67 | 0.71 | 0.82 | 0.82 | 0.91 |
| Debt-to-equity ratio | 1.99 | 2.46 | 4.49 | 4.53 | 9.56 |
| Financial leverage ratio | 4.10 | 4.82 | 7.53 | 7.63 | 16.36 |
Vontier Corp's solvency ratios provide insight into the company's ability to meet its long-term financial obligations. The debt-to-assets ratio has been gradually increasing from 0.58 in 2020 to 0.49 in 2024, indicating a higher portion of the company's assets are financed by debt over the years.
The debt-to-capital ratio, which measures the proportion of debt in the company's capital structure, has decreased from 0.91 in 2020 to 0.67 in 2024. This suggests that Vontier Corp has been relying less on debt funding relative to its total capital base.
The debt-to-equity ratio has shown a significant decline from 9.56 in 2020 to 1.99 in 2024, highlighting a substantial reduction in the company's dependency on debt in relation to equity financing.
The financial leverage ratio, reflecting the extent of financial risk borne by the company, has decreased from 16.36 in 2020 to 4.10 in 2024. This decreasing trend indicates that Vontier Corp has been managing its financial leverage more efficiently, potentially reducing the risks associated with high debt levels.
Overall, the trend in Vontier Corp's solvency ratios suggests a gradual improvement in the company's financial strength and capacity to meet its long-term obligations, as indicated by lower debt reliance and improved leverage ratios over the years.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 7.19 | 5.74 | 8.56 | 15.69 | 585.25 |
Based on the provided data, Vontier Corp's interest coverage has experienced a significant decline over the past few years. In December 2020, the interest coverage ratio was very high at 585.25, indicating that the company had more than enough earnings to cover its interest expenses. However, by December 2021, this ratio dropped to 15.69, suggesting a significant decrease in the company's ability to cover its interest payments.
This downward trend continued in the following years, with the interest coverage ratios for December 31, 2022, 2023, and 2024 standing at 8.56, 5.74, and 7.19, respectively. These declining ratios indicate that Vontier Corp may be facing challenges in generating sufficient earnings to cover its interest expenses. It is essential for the company to closely monitor its financial performance and take appropriate measures to improve its interest coverage ratio to ensure financial stability and sustainability.