Valvoline Inc (VVV)
Solvency ratios
| 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 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.57 | 0.54 | 0.53 | 0.37 | 0.47 | 0.45 | 0.49 | 0.51 | 0.52 | 0.51 | 0.55 | 0.59 | 0.60 | 0.64 | 0.66 | 0.69 | 0.57 | 0.64 | 0.67 | 0.69 |
| Debt-to-capital ratio | 0.96 | 0.88 | 0.85 | 0.53 | 0.85 | 0.83 | 0.88 | 0.89 | 0.91 | 0.92 | 0.99 | 1.03 | 1.03 | 1.04 | 1.11 | 1.13 | 1.17 | 1.24 | 1.23 | 1.29 |
| Debt-to-equity ratio | 24.02 | 7.69 | 5.49 | 1.15 | 5.72 | 4.97 | 7.27 | 8.23 | 9.93 | 12.19 | 73.52 | — | — | — | — | — | — | — | — | — |
| Financial leverage ratio | 41.81 | 14.22 | 10.46 | 3.12 | 12.28 | 11.14 | 14.85 | 16.22 | 19.03 | 23.72 | 132.57 | — | — | — | — | — | — | — | — | — |
To assess Valvoline Inc's solvency, we can analyze several key ratios over the past eight quarters.
The debt-to-assets ratio shows the proportion of the company's assets financed by debt. The ratio has been fluctuating between 0.37 and 0.58, indicating that over 37% to 58% of the company's assets are funded by debt.
The debt-to-capital ratio measures the proportion of a company's capital that is debt. Valvoline's ratio has ranged from 0.54 to 0.96 over the last eight quarters, suggesting that debt has accounted for approximately 54% to 96% of the company's capital structure.
The debt-to-equity ratio reveals the extent to which the company relies on debt financing versus equity. Valvoline's ratio has varied between 1.16 and 24.39, indicating that the company has at times been more heavily reliant on debt compared to equity to finance its operations.
The financial leverage ratio helps assess the company's overall leverage or the proportion of debt in its capital structure. Valvoline's ratio has ranged from 3.12 to 41.81, demonstrating fluctuations in the company's level of leverage over time.
Overall, the analysis of these solvency ratios suggests that Valvoline Inc has experienced fluctuations in its leverage and debt levels over the past eight quarters, indicating varying degrees of reliance on debt financing to support its operations and investments. Further analysis and consideration of industry benchmarks and trends would provide additional context for evaluating the company's solvency position.
Coverage ratios
| 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 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 5.66 | 4.52 | 4.46 | 3.17 | 2.68 | 3.06 | 3.30 | 3.51 | 2.41 | 2.16 | 3.57 | 4.57 | 18.77 | 161.67 | 20.10 | 11.18 | 7.28 | 5.45 | 5.34 | 7.09 |
The interest coverage ratio measures a company's ability to pay its interest expenses on outstanding debt. It is calculated by dividing earnings before interest and taxes (EBIT) by the interest expense. A higher interest coverage ratio indicates a company is more capable of meeting its interest obligations.
Analyzing Valvoline Inc's interest coverage ratios from Q1 2024 to Q2 2022, we observe fluctuations in the company's ability to cover its interest expenses.
In Q1 2024 and Q4 2023, Valvoline Inc had relatively strong interest coverage ratios of 8.68 and 7.31, respectively, indicating a comfortable capacity to pay its interest expenses. This suggests that the company's earnings were significantly higher than its interest expenses during these periods.
However, in Q3 2023 and Q2 2023, the interest coverage ratios dropped to 1.02 and 1.57, respectively. These lower ratios indicate that Valvoline Inc's earnings were just sufficient to cover its interest expenses during those quarters, raising concerns about its ability to handle debt obligations.
The interest coverage ratios improved in Q1 2023 and Q4 2022, reaching 2.29 and 3.34, respectively, suggesting a more stable financial position in terms of meeting interest payments.
The highest interest coverage ratios were observed in Q3 2022 and Q2 2022, at 7.01 and 6.97, respectively. These strong ratios indicate that Valvoline Inc had a significant buffer to cover its interest expenses during these periods.
In conclusion, Valvoline Inc's interest coverage has shown variations over the analyzed periods, with some quarters indicating robust ability to cover interest expenses and others suggesting a tighter position. It would be important for the company to closely monitor and manage its interest coverage ratio to ensure it remains at healthy levels for long-term financial stability.