Worthington Industries Inc (WOR)
Solvency ratios
| May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 1.81 | 1.84 | 2.15 | 2.46 | 2.41 |
The solvency analysis of Worthington Industries Inc., based on the provided ratios, indicates a consistent absence of debt across the specified periods from May 31, 2021, to May 31, 2025. The Debt-to-Assets, Debt-to-Capital, and Debt-to-Equity ratios are uniformly zero throughout this timeframe, suggesting that the company operates without leverage from debt financing. This implies that the company's assets are entirely financed through equity or retained earnings, reflecting a conservative approach to capital structure and a robust solvency position.
In addition, the Financial Leverage Ratio exhibits a declining trend over the analyzed periods, decreasing from 2.41 in 2021 to 1.81 in 2025. This ratio, which measures the extent to which a company utilizes debt to finance its assets, being greater than 1 throughout indicates the presence of some degree of leverage, although the decreasing trend suggests a gradual reduction in leverage over time. The consistent zero debt ratios coupled with declining financial leverage ratios underscore a shift towards a more conservative financial policy, emphasizing solvent operations with minimal reliance on debt.
Overall, the data indicates that Worthington Industries Inc. maintains a strong solvency position characterized by no leverage from debt. The company’s capital structure appears fully equity-based, presenting a low financial risk profile and resilient solvency standing over the analyzed years.
Coverage ratios
| May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | |
|---|---|---|---|---|---|
| Interest coverage | 0.00 | 47.75 | 1.36 | 17.41 | 9.49 |
The interest coverage ratios for Worthington Industries Inc over the specified periods demonstrate significant fluctuations in the company’s ability to meet its interest obligations from its earnings before interest and taxes (EBIT).
As of May 31, 2021, the interest coverage ratio stood at approximately 9.49, indicating a strong capacity to cover interest expenses, with earnings nearly 9.5 times the interest costs. This metric substantially increased to approximately 17.41 by May 31, 2022, highlighting an improved financial position and further strengthening the company's interest coverage.
However, a sharp decline is evident by May 31, 2023, where the ratio decreased significantly to roughly 1.36. This dramatic reduction signals a deterioration in the company's ability to safely cover interest expenses, suggesting a potential risk added to the company's financial health.
In the following year, May 31, 2024, the ratio dramatically surged to 47.75, indicating an exceptional level of earnings relative to interest obligations, which could reflect a substantial increase in profitability or one-time earnings. Conversely, by May 31, 2025, the ratio falls to 0.00, implying that the company either reported no earnings before interest and taxes or its EBIT was insufficient to cover interest expenses, raising concerns over financial distress or profitability issues.
Overall, the data illustrates a volatile interest coverage trend, with periods of very strong coverage interspersed with significant declines. The substantial year-over-year fluctuations may reflect changes in operational performance, profitability, or extraordinary items affecting EBIT, potentially impacting creditors' confidence and the company's financial stability.