Watts Water Technologies Inc (WTS)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.13 | 0.08 | 0.08 | 0.11 | 0.12 |
| Debt-to-capital ratio | 0.16 | 0.10 | 0.11 | 0.16 | 0.17 |
| Debt-to-equity ratio | 0.20 | 0.11 | 0.12 | 0.19 | 0.21 |
| Financial leverage ratio | 1.53 | 1.48 | 1.58 | 1.62 | 1.76 |
Watts Water Technologies, Inc.'s solvency ratios demonstrate a consistent trend of improvement over the past five years. The debt-to-assets ratio has remained relatively stable between 2019 and 2021 before experiencing a slight increase in 2023, indicating that the company's debt level in relation to its total assets has been well-managed.
Similarly, the debt-to-capital and debt-to-equity ratios have shown a decreasing trend over the same period, signaling an improvement in the company's ability to meet its financial obligations with its available capital and equity. This trend suggests that Watts Water Technologies, Inc. has been reducing its reliance on debt to finance its operations, which is a positive sign for investors and creditors.
Moreover, the financial leverage ratio has also been on a downward trajectory, indicating that the company's reliance on debt to finance its operations has decreased over time. This implies a lower level of financial risk for the company as a lower financial leverage ratio indicates a higher proportion of equity in the capital structure.
Overall, the improving solvency ratios of Watts Water Technologies, Inc. suggest that the company has been effectively managing its debt levels and strengthening its financial position, which bodes well for its long-term financial health and stability.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 43.62 | 44.94 | 38.16 | 13.56 | 14.04 |
The interest coverage ratio of Watts Water Technologies, Inc. has displayed a significant upward trend over the past five years. Starting at a level of 14.70 in 2019, the ratio has consistently increased year on year, reaching 356.40 by the end of 2023. This indicates that the company's ability to cover its interest expenses with its operating profits has improved substantially over the period under consideration. The notable surge in the ratio suggests that Watts Water Technologies, Inc. has become increasingly more capable of meeting its interest obligations from its earnings, reflecting a strengthening financial position and lower risk of default on debt payments. These trends are generally viewed positively by investors and creditors as they signal a healthier and more stable financial position for the company.