Vontier Corp (VNT)
Solvency ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.49 | 0.51 | 0.52 | 0.51 | 0.51 | 0.56 | 0.58 | 0.59 | 0.60 | 0.62 | 0.62 | 0.60 | 0.59 |
| Debt-to-capital ratio | 0.67 | 0.68 | 0.68 | 0.69 | 0.71 | 0.76 | 0.78 | 0.80 | 0.82 | 0.84 | 0.84 | 0.83 | 0.82 |
| Debt-to-equity ratio | 1.99 | 2.12 | 2.16 | 2.22 | 2.46 | 3.09 | 3.48 | 3.96 | 4.49 | 5.30 | 5.21 | 4.71 | 4.53 |
| Financial leverage ratio | 4.10 | 4.16 | 4.17 | 4.37 | 4.82 | 5.56 | 6.04 | 6.72 | 7.53 | 8.57 | 8.45 | 7.84 | 7.63 |
Vontier Corp's solvency ratios indicate the company's ability to meet its long-term financial obligations. The trends in the ratios over the reporting periods reveal insights into the company's financial leverage and risk.
The Debt-to-assets ratio shows a gradual decline from 0.59 in December 2021 to 0.49 in December 2024. This suggests that the company has been reducing its dependence on debt to finance its assets, which is positive for solvency.
The Debt-to-capital ratio also exhibits a decreasing trend, moving from 0.82 in December 2021 to 0.67 in December 2024. This indicates that Vontier has been decreasing its reliance on debt in relation to its total capital structure, which is a good sign for solvency.
The Debt-to-equity ratio demonstrates a significant decline from 4.53 in December 2021 to 1.99 in December 2024. This substantial drop indicates that the company has been reducing its financial leverage and relying more on equity financing, which can enhance solvency and financial stability.
Furthermore, the Financial leverage ratio has been consistently decreasing from 7.63 in December 2021 to 4.10 in December 2024, indicating that the company has been effectively managing its leverage and reducing the level of risk in its capital structure over the years.
Overall, Vontier Corp's solvency ratios reflect a positive trend towards reduced debt dependence, improved capital structure, and lower financial leverage, which collectively enhance the company's ability to meet its long-term financial obligations and maintain financial stability.
Coverage ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 7.19 | 3.61 | 4.19 | 4.90 | 5.74 | 8.15 | 8.27 | 8.53 | 8.56 | 15.74 | 16.16 | 15.70 | 15.69 |
The interest coverage ratio measures a company's ability to meet its interest obligations on outstanding debt. A higher interest coverage ratio indicates that the company is more capable of servicing its debt.
Looking at the data provided for Vontier Corp, we observe fluctuations in the interest coverage ratio over the reporting periods. The interest coverage ratio remained relatively stable and healthy around 15.7 to 16.2 for the first half of 2022. This indicates that the company had a comfortable margin to cover its interest expenses using its earnings.
However, starting from the end of 2022 and continuing into 2023 and 2024, there is a noticeable decline in the interest coverage ratio, dropping significantly to as low as 3.61 by September 30, 2024. A declining trend in the interest coverage ratio suggests that Vontier Corp may be facing challenges in generating sufficient earnings to cover its interest payments in a sustainable manner.
The sharp decrease in the interest coverage ratio towards the end of the reporting period raises concerns about the company's ability to service its debt effectively. It is essential for investors and stakeholders to further investigate the reasons behind this decline and assess the company's financial health and risk management strategies to address the declining trend in interest coverage.