Analysis of Solvency Ratios
Quarterly Data
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
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- Common-Size Balance Sheet: Assets
- Analysis of Geographic Areas
- Common Stock Valuation Ratios
- Enterprise Value (EV)
- Enterprise Value to EBITDA (EV/EBITDA)
- Present Value of Free Cash Flow to Equity (FCFE)
- Selected Financial Data since 2005
- Price to Book Value (P/BV) since 2005
- Price to Sales (P/S) since 2005
- Aggregate Accruals
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Solvency Ratios (Summary)
Albemarle Corp., solvency ratios (quarterly data)
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
The financial data exhibits several noteworthy trends in the company's leverage and interest coverage ratios over the examined periods.
- Leverage Ratios
- The debt to equity ratio shows a moderate increase from early 2019 until the end of 2020, rising from 0.5 to approximately 0.84-0.88, indicating an increased reliance on debt relative to equity during this period. This trend reverses sharply entering 2021, with the ratio declining to a low near 0.33 before gradually rising again to about 0.57 in mid-2022 and subsequently decreasing to 0.35 by March 2023.
- Similarly, the debt to capital ratio follows a comparable pattern: increasing from about 0.33 in early 2019 to a peak near 0.46 by late 2020, followed by a decline to around 0.25-0.3 throughout 2021. The ratio experiences a mild increase into mid-2022 before tapering off again towards the beginning of 2023.
- Debt to assets ratio progresses in parallel, moving upward from roughly 0.23 to 0.35 during 2019 to 2020 and then dropping to the range of 0.18 to 0.22 starting in 2021 through early 2023. This implies a reduction in total leverage against asset base after 2020.
- Financial leverage ratio rises steadily from about 2.12 in the first quarter of 2019 to 2.54 by mid-2020, followed by a marked decrease to near 1.75–1.95 through 2021 and stabilizing around 1.9 by the first quarter of 2023. This decline in financial leverage indicates improved capitalization or reduced debt dependency in more recent periods.
- Interest Coverage Ratio
- The interest coverage ratio declines notably from a high of approximately 18.76 in early 2019 to a low around 4.7-4.9 by late 2021, signaling reduced earnings relative to interest obligations during this interval. However, beginning in late 2021, this ratio rebounds sharply, rising to an exceptionally strong level above 37 by March 2023. This enhancement suggests significant improvement in earnings capacity to cover interest expenses, possibly reflecting stronger operational performance or decreased interest expenses.
Overall, the data suggests a phase of increased leverage and weakening interest coverage through 2019 into 2020, followed by a period of deleveraging and substantially improved interest coverage from 2021 onward. The reduction in leverage metrics after 2020 and the markedly higher interest coverage toward the most recent quarter point to strengthening financial stability and creditworthiness in the latest periods.
Debt Ratios
Coverage Ratios
Debt to Equity
Albemarle Corp., debt to equity calculation (quarterly data)
| 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||
| Current portion of long-term debt | |||||||||||||||||||||||
| Long-term debt, excluding current portion | |||||||||||||||||||||||
| Total debt | |||||||||||||||||||||||
| Total Albemarle Corporation shareholders’ equity | |||||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||||
| Debt to equity1 | |||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||
| Debt to Equity, Competitors2 | |||||||||||||||||||||||
| Linde plc | |||||||||||||||||||||||
| Sherwin-Williams Co. | |||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q1 2023 Calculation
Debt to equity = Total debt ÷ Total Albemarle Corporation shareholders’ equity
= ÷ =
2 Click competitor name to see calculations.
- Total Debt
- The total debt exhibited a relatively stable level around 1.8 to 1.9 billion USD during the first three quarters of 2019, followed by a significant increase in the fourth quarter of 2019 to over 3 billion USD. This elevated debt level persisted through 2020, fluctuating slightly but remaining above 3 billion USD. In 2021, total debt notably decreased to approximately 2 billion USD, maintaining this reduced range for most of the year with a slight uptick towards the end. In 2022, total debt increased again, peaking above 3.4 billion USD mid-year before gradually declining towards the end of the year and the first quarter of 2023, settling around 3.2 billion USD. Overall, the debt levels showed periods of sharp increase and subsequent partial reduction over the analyzed timeframe.
- Total Shareholders’ Equity
- Shareholders' equity showed an overall upward trend across the timeframe. Starting at approximately 3.67 billion USD in early 2019, it increased steadily throughout 2019 and 2020, reaching about 4.27 billion USD by the end of 2020. The upward trajectory accelerated significantly in 2021, with equity values rising from about 5.75 billion USD at the start of the year to nearly 5.63 billion USD at year-end, with a slight dip in the third quarter. In 2022, shareholders’ equity continued its robust growth, moving from approximately 5.83 billion USD to 7.98 billion USD by the end of the year. This growth persisted into the first quarter of 2023, culminating in a value exceeding 9.2 billion USD. The data indicates sustained strengthening of the equity base over this period.
- Debt to Equity Ratio
- The debt to equity ratio largely mirrored the movements observed in debt and equity values. During 2019, this ratio increased from 0.5 to 0.78 by year-end, reflecting the significant rise in debt relative to equity. In 2020, the ratio remained elevated, peaking at 0.88 mid-year before slightly declining to 0.84 by the end of the year, indicative of continued high leverage. A marked reduction occurred in 2021, with the ratio falling to a low of 0.33 mid-year before rising modestly to 0.43 by year-end. In 2022, the ratio fluctuated, increasing to 0.57 mid-year before gradually declining again to 0.35 by the beginning of 2023. The ratio trends highlight periods of increased leverage followed by deleveraging phases, with the most recent data suggesting a moderate leverage position.
Debt to Capital
Albemarle Corp., debt to capital calculation (quarterly data)
| 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||
| Current portion of long-term debt | |||||||||||||||||||||||
| Long-term debt, excluding current portion | |||||||||||||||||||||||
| Total debt | |||||||||||||||||||||||
| Total Albemarle Corporation shareholders’ equity | |||||||||||||||||||||||
| Total capital | |||||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||||
| Debt to capital1 | |||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||
| Debt to Capital, Competitors2 | |||||||||||||||||||||||
| Linde plc | |||||||||||||||||||||||
| Sherwin-Williams Co. | |||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q1 2023 Calculation
Debt to capital = Total debt ÷ Total capital
= ÷ =
2 Click competitor name to see calculations.
- Total Debt
- Over the observed periods, total debt displayed a fluctuating trend. Initially, from March 2019 to December 2019, total debt increased significantly from approximately 1.82 billion USD to over 3.05 billion USD. This upward trend continued modestly through 2020, peaking near 3.57 billion USD by the end of the year. However, in 2021, a notable reduction occurred, with debt levels dropping to around 2.03 billion USD by the first quarter, before slightly rising toward the end of the year. Entering 2022 and continuing into early 2023, total debt increased again, reaching just above 3.23 billion USD by March 2023, though this level remained below the late 2020 peak. This pattern indicates periods of increased leverage followed by deleveraging actions.
- Total Capital
- Total capital showed a consistent upward trajectory throughout the period examined. Starting at approximately 5.49 billion USD in March 2019, capital steadily rose each quarter, surpassing 7.84 billion USD by the end of 2020. The upward momentum persisted into 2021 despite some fluctuations, reaching over 8 billion USD. Notably, the growth accelerated in 2022, with total capital expanding sharply from around 8.32 billion USD in the first quarter to nearly 12.45 billion USD by March 2023. This sustained increase suggests strengthening financial resources and a growing asset base, potentially supporting business expansion or increased investment capacity.
- Debt to Capital Ratio
- The debt to capital ratio exhibited a variable pattern corresponding with movements in both debt and capital. Initially stable at approximately 0.33 during 2019, the ratio rose markedly to around 0.46 by the end of 2019 and maintained similar levels through 2020, reflecting increased leverage relative to total capital. A significant decline occurred in 2021, with the ratio dropping to near 0.25-0.3, indicating reduced reliance on debt financing or an increase in capital outpacing debt growth. In 2022, the ratio climbed again to approximately 0.36 before trending downward toward 0.26 by early 2023. Overall, these fluctuations suggest strategic capital structure adjustments, balancing debt usage and capital growth to optimize leverage.
Debt to Assets
Albemarle Corp., debt to assets calculation (quarterly data)
| 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||
| Current portion of long-term debt | |||||||||||||||||||||||
| Long-term debt, excluding current portion | |||||||||||||||||||||||
| Total debt | |||||||||||||||||||||||
| Total assets | |||||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||||
| Debt to assets1 | |||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||
| Debt to Assets, Competitors2 | |||||||||||||||||||||||
| Linde plc | |||||||||||||||||||||||
| Sherwin-Williams Co. | |||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q1 2023 Calculation
Debt to assets = Total debt ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
- Total Debt
- The total debt exhibited a rising trend from late March 2019 through the end of 2020, increasing from approximately 1.82 billion to 3.57 billion US dollars. This represented a significant buildup in liabilities over this period. However, starting in 2021, total debt declined markedly, dropping to a range between roughly 2.0 billion and 2.4 billion US dollars during the first year of observation in this period. Following this, there was a notable resurgence in debt levels in 2022, reaching a peak of around 3.46 billion in the second quarter before gradually declining again toward early 2023 to approximately 3.24 billion. Overall, total debt showed considerable volatility with a tendency towards reduction at the end of the timeline assessed.
- Total Assets
- Total assets demonstrated a consistent upward trajectory from approximately 7.87 billion US dollars at the beginning of 2019 to about 17.56 billion by the first quarter of 2023. This growth was steady throughout the period, suggesting ongoing asset accumulation or appreciation. The increases were particularly pronounced from mid-2021 onward, with asset values nearly doubling over approximately two years. This long-term expansion in assets indicates a strengthening of the asset base over the quarters analyzed.
- Debt to Assets Ratio
- The debt to assets ratio showed an initial increase from 0.23 in early 2019 to a peak of 0.35 in the second half of 2020, reflecting the rise in debt outpacing asset growth during that time. Starting in 2021, the ratio declined steadily, reaching a low of 0.18 by the first quarter of 2023. This downward trend implies an improvement in the company’s leverage position, with assets growing faster than debt or debt being paid down relative to asset size. The ratio’s fluctuation corresponded inversely with the changes in total debt and asset levels, highlighting an improving balance sheet strength in the latter periods.
Financial Leverage
Albemarle Corp., financial leverage calculation (quarterly data)
| 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||
| Total assets | |||||||||||||||||||||||
| Total Albemarle Corporation shareholders’ equity | |||||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||||
| Financial leverage1 | |||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||
| Financial Leverage, Competitors2 | |||||||||||||||||||||||
| Linde plc | |||||||||||||||||||||||
| Sherwin-Williams Co. | |||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q1 2023 Calculation
Financial leverage = Total assets ÷ Total Albemarle Corporation shareholders’ equity
= ÷ =
2 Click competitor name to see calculations.
The financial data reveals several notable trends in the company's asset base, equity, and leverage over the examined periods.
- Total Assets
- Total assets exhibited a general upward trajectory from just under 7.9 billion US dollars at the beginning of 2019 to over 17.5 billion by the first quarter of 2023. The growth accelerated especially starting in 2021, illustrating substantial asset accumulation. This continuous expansion suggests ongoing investment or asset acquisition activities over time.
- Total Shareholders’ Equity
- Shareholders’ equity increased from approximately 3.7 billion US dollars in early 2019 to over 9.2 billion by the first quarter of 2023. A marked increase is observed in 2021, where equity surged sharply compared to previous years. This indicates enhanced retained earnings, possible capital contributions, or revaluation gains strengthening the company’s net worth. However, some fluctuations occurred in late 2021, reflecting temporary declines before resuming growth.
- Financial Leverage
- Financial leverage ratios mostly ranged between approximately 1.75 and 2.54 across the period. Notably, leverage peaked at about 2.5 towards the end of 2019 and mid-2020, indicating higher reliance on debt financing or liabilities relative to equity during that interval. Subsequent periods saw leverage decline to around 1.9 by early 2023, implying reduced relative indebtedness and potentially a more conservative financial structure.
Overall, the company experienced substantial asset and equity growth over the time frame, with a corresponding moderation in leverage after reaching historical highs. This pattern may reflect strategic capital management aimed at balancing growth and financial risk.
Interest Coverage
Albemarle Corp., interest coverage calculation (quarterly data)
| 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||||
| Net income (loss) attributable to Albemarle Corporation | |||||||||||||||||||||||
| Add: Net income attributable to noncontrolling interest | |||||||||||||||||||||||
| Add: Income tax expense | |||||||||||||||||||||||
| Add: Interest and financing expenses | |||||||||||||||||||||||
| Earnings before interest and tax (EBIT) | |||||||||||||||||||||||
| Solvency Ratio | |||||||||||||||||||||||
| Interest coverage1 | |||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||
| Interest Coverage, Competitors2 | |||||||||||||||||||||||
| Sherwin-Williams Co. | |||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q1 2023 Calculation
Interest coverage
= (EBITQ1 2023
+ EBITQ4 2022
+ EBITQ3 2022
+ EBITQ2 2022)
÷ (Interest expenseQ1 2023
+ Interest expenseQ4 2022
+ Interest expenseQ3 2022
+ Interest expenseQ2 2022)
= ( + + + )
÷ ( + + + )
=
2 Click competitor name to see calculations.
The analysis of the financial data reveals several notable trends in the company's earnings before interest and tax (EBIT), interest and financing expenses, and interest coverage ratio over the observed periods.
- Earnings before Interest and Tax (EBIT)
- The EBIT figures demonstrate fluctuations over the years with periods of both growth and decline. From early 2019 through 2019, EBIT values were relatively stable, ranging between approximately $123 million and $217 million. In 2020, a decline is observed with some recovery in Q3 but followed by a low in Q4 2020. The year 2021 shows significant volatility, particularly in Q2 and Q3, with an exceptional spike in Q2 2021, followed by a large negative figure in Q3 2021, indicating possible extraordinary items or operational challenges. Subsequent quarters demonstrate a sharp recovery and a strong upward trend throughout 2022 and into early 2023, culminating in the highest EBIT value recorded in Q1 2023, suggesting improved operational performance or favorable market conditions.
- Interest and Financing Expenses
- Interest expenses remain relatively moderate and stable compared to EBIT, fluctuating generally between $11 million and $44 million. An exception occurs in Q1 2021 with a sharp increase to approximately $44 million, which then decreases and stabilizes in subsequent quarters. Although interest expenses increased somewhat towards late 2022 and early 2023, the magnitude of these expenses is small relative to EBIT, indicating manageable debt servicing costs.
- Interest Coverage Ratio
- The interest coverage ratio shows a downward trend from 2019 to late 2020, starting around 18.76 and falling to around 7.85, reflecting a decrease in EBIT relative to interest expenses and potentially higher financial risk. In 2021, the ratio varies significantly, dropping to as low as 4.73 in Q4 before rebounding sharply in subsequent quarters. The recovery in 2022 and 2023 is pronounced, with the ratio rising above 20 and ultimately reaching over 37 by Q1 2023. This indicates a substantial improvement in the company's ability to cover interest expenses with operating earnings, suggesting stronger financial health and reduced risk regarding debt obligations.
Overall, the company's financial performance exhibits periods of instability, particularly in 2021, but with a strong recovery in earnings and greatly improved interest coverage in the most recent periods. The trends suggest enhanced operational efficiency or market conditions driving higher EBIT, coupled with controlled interest expenses, resulting in improved financial robustness.