Vontier Corp (VNT)

Looking at Vontier Corporation's solvency ratios over the past five years, several insights can be gleaned:

1. Debt-to-assets ratio: This ratio indicates the proportion of the company's assets that are financed by debt. Vontier's debt-to-assets ratio has been relatively stable over the years, ranging from 0.01 in 2019 to 0.60 in 2022. A decreasing trend from 2022 to 2023 suggests a reduction in reliance on debt to finance assets.

2. Debt-to-capital ratio: This ratio measures the extent of debt financing in relation to the company's total capital, which includes both debt and equity. Vontier's debt-to-capital ratio has also shown stability over the years, with a slight decrease from 0.91 in 2020 to 0.72 in 2023, indicating a lower reliance on debt within the capital structure.

3. Debt-to-equity ratio: Vontier's debt-to-equity ratio reveals the proportion of debt relative to equity in the company's capital structure. The significant decrease in this ratio from 2019 to 2020, followed by a gradual decline in subsequent years, indicates a trend towards a healthier balance between debt and equity financing.

4. Financial leverage ratio: This ratio measures the company's financial leverage or the extent to which it relies on debt to finance its operations. Vontier's financial leverage ratio has shown a considerable decline from 2019 to 2023, indicating a reduction in the company's overall financial risk and increased stability in its capital structure.

Overall, Vontier Corporation's solvency ratios demonstrate a trend towards reduced reliance on debt financing and a more balanced capital structure. This suggests improved financial stability and risk management over the years.

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Coverage ratios

The interest coverage ratio for Vontier Corporation has been on a declining trend over the past five years, starting at 55.35 in 2020 and decreasing to 5.80 in 2023. This indicates that the company's ability to cover its interest expenses with its earnings has weakened over time. A higher interest coverage ratio is typically preferred as it signifies that the company has sufficient earnings to meet its interest obligations. The noticeable decrease in the interest coverage ratio highlights a potential increase in financial risk for the company, as lower coverage ratios may indicate higher debt burdens or declining profitability. Further examination of Vontier's financial position and performance is warranted to understand the underlying reasons for this decline and to assess the company's overall financial health.