Yum! Brands Inc (YUM)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| 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. provide insights into the company's ability to meet its long-term financial obligations and the extent of its leverage.
1. Debt-to-assets ratio:
- The trend in the debt-to-assets ratio indicates a fluctuating pattern over the past five years, ranging from 1.80 to 2.03. This ratio measures the proportion of the company's assets financed by debt. A lower ratio typically suggests a lower financial risk, indicating that Yum Brands relies less on debt to fund its operations and investments.
2. Debt-to-capital ratio:
- The debt-to-capital ratio has shown a similar fluctuating trend, ranging from 3.35 to 4.15 over the same period. This ratio reflects the proportion of the company's funding that comes from debt compared to total capital employed (debt + equity). A higher ratio signifies a higher level of financial risk and dependency on debt financing.
3. Debt-to-equity ratio:
- Unfortunately, the data for the debt-to-equity ratio is not provided, limiting a comprehensive analysis of Yum Brands' leverage position in terms of debt and equity.
4. Financial leverage ratio:
- Similarly, information on the financial leverage ratio is not available, which hinders a complete evaluation of the company's capital structure efficiency and risk exposure.
Overall, based on the data provided, Yum Brands Inc. has exhibited fluctuations in its debt-to-assets and debt-to-capital ratios, indicating varying levels of reliance on debt financing to support its operations and growth. A more detailed analysis would be warranted with additional information on the debt-to-equity ratio and financial leverage ratio to assess the company's solvency position more comprehensively.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 3.84 | 3.90 | 3.85 | 2.68 | 3.70 |
The interest coverage ratio for Yum Brands Inc. has shown a generally positive trend over the past five years, reflecting the company's ability to meet its interest obligations with ease.
In 2023, the interest coverage ratio improved to 4.49, indicating that Yum Brands generated 4.49 times the earnings needed to cover its interest expenses. This represents an increase from the previous year's ratio of 4.11 in 2022 and demonstrates a strengthening ability to service its debt obligations.
Looking further back, the interest coverage ratio was 3.87 in 2021, 2.99 in 2020, and 3.90 in 2019. While there was a slight dip in 2020, Yum Brands was able to bounce back and improve its interest coverage ratio in subsequent years.
Overall, the consistent improvement in the interest coverage ratio for Yum Brands indicates a healthy financial position with sufficient earnings to cover interest costs, providing a favorable outlook for the company's ability to manage its debt obligations effectively.