Chemical financial strength

As described, fundamental trends in the chemical industry particularly favor leading distributors like Brenntag, which can enter into partnerships with chemical producers on the basis of sufficient geographical coverage and the required financial strength to make investments in environmental standards, as well as adequate technical sales capabilities and services. 

The equity ratio is defined as the ratio of stockholders equity to total assets. It measures the long-term financial strength of a company. From Table 16.3, the equity ratio for U.S. Chemicals is 4,361/14,211 = 0.31, which, again, is too low a value. This ratio should be about 0.50. If the equity ratio is too high, the company may be curtailing its growth. At the end of the year 2000, Monsanto Company had an equity ratio of 0.63. 

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