Valvoline Inc (VVV)

The solvency ratios of Valvoline Inc indicate its ability to meet its long-term financial obligations and manage its debt levels effectively. The debt-to-assets ratio has shown a decreasing trend from 0.64 in 2020 to 0.44 in 2024, suggesting a more conservative approach in financing its assets. This implies that 44% of Valvoline's assets are financed by debt in 2024.

Similarly, the debt-to-capital ratio has also decreased over the years, reflecting a reduction in the proportion of debt in Valvoline's capital structure. In 2024, 85% of Valvoline's capital is funded by debt, indicating a significant improvement from 104% in 2020.

The debt-to-equity ratio has fluctuated over the years but has generally trended downward, with a considerable decrease from 12.19 in 2021 to 5.77 in 2024. This indicates a lower reliance on debt funding relative to equity, which is a positive sign for the company's financial health and risk management.

Finally, the financial leverage ratio, which measures the company's total assets relative to equity, has shown a decreasing trend from 23.72 in 2021 to 13.14 in 2024. This suggests that Valvoline's reliance on debt to finance its assets has reduced over time, indicating a more sustainable and less risky capital structure.

Overall, the solvency ratios of Valvoline Inc demonstrate an improving financial position in terms of managing debt and capital structure, which bodes well for the company's long-term stability and ability to navigate challenging economic conditions.

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Coverage ratios

The interest coverage ratio for Valvoline Inc has shown a fluctuating trend over the past five years, ranging from 23.69 to 53.40. The ratio indicates the company's ability to meet its interest obligations from its operating income.

In 2020, the interest coverage ratio was at its highest point of 53.40, suggesting that the company had significant earnings to cover its interest expenses. However, this ratio decreased in the following years, reaching a low of 23.69 in 2022, indicating a potential strain on the company's ability to cover interest payments.

The most recent data for Sep 30, 2024, shows an interest coverage ratio of 33.08, indicating an improvement from the previous year but still lower than the peak observed in 2020. This suggests that Valvoline Inc's operating income may be sufficient to cover interest expenses, but it may warrant continued monitoring to ensure financial stability and debt repayment capability.