Yum! Brands Inc (YUM)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | — | — | — | — | — |
| Debt-to-equity ratio | — | — | — | — | — |
| Financial leverage ratio | — | — | — | — | — |
The solvency ratios of Yum! Brands Inc, based on the provided data, indicate a strong financial position in terms of debt management and leverage:
1. Debt-to-assets ratio: This ratio measures the proportion of a company's assets financed by debt. Yum! Brands Inc consistently shows a debt-to-assets ratio of 0.00 from 2020 to 2024. A ratio of 0.00 suggests that the company has no debt relative to its total assets, indicating a low financial risk.
2. Debt-to-capital ratio: The debt-to-capital ratio compares a company's total debt to its total capital (debt + equity). The data shows that this ratio is not provided, denoted by "—," which may indicate that Yum! Brands Inc does not have significant debt relative to its overall capital.
3. Debt-to-equity ratio: The debt-to-equity ratio indicates the proportion of a company's financing that comes from debt compared to equity. Similar to the debt-to-capital ratio, the data shows that this ratio is not provided ("—"), suggesting that Yum! Brands Inc may have a capital structure with minimal debt in relation to equity.
4. Financial leverage ratio: The financial leverage ratio measures the extent to which a company utilizes debt to finance its operations. The data indicates that the financial leverage ratio is not available ("—"), which may imply that Yum! Brands Inc's financial structure is not heavily reliant on debt to support its activities.
Overall, based on the information provided for Yum! Brands Inc, the company appears to maintain a conservative and prudent approach to debt management, with minimal debt levels in relation to its assets and capital. This signifies a favorable solvency position and lower financial risk for the company.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 4.43 | 3.84 | 3.90 | 3.85 | 2.68 |
Interest coverage ratio is a key financial metric that indicates a company's ability to cover its interest expenses with its operating income. A higher interest coverage ratio implies that the company is more capable of meeting its interest obligations.
Based on the provided data for Yum! Brands Inc, the interest coverage ratio has been improving over the years. In December 31, 2020, the interest coverage ratio was 2.68, indicating that the company's operating income was able to cover its interest expenses 2.68 times.
Subsequently, the interest coverage ratio increased to 3.85 in December 31, 2021, and continued to improve in the following years, reaching 3.90 in December 31, 2022, 3.84 in December 31, 2023, and finally peaking at 4.43 in December 31, 2024.
This progressive increase in the interest coverage ratio reflects Yum! Brands Inc's strengthening ability to meet its interest payments using its operating income. It suggests that the company's financial health has been improving, as it is generating more income to cover its interest expenses, which is a positive sign for investors and creditors.