ADEIA CORP (ADEA)

The solvency ratios of ADEIA CORP indicate the company's ability to meet its long-term financial obligations and the extent of its leverage.

1. Debt-to-assets ratio:
- A decreasing trend in the debt-to-assets ratio has been observed from 2020 to 2023, which is a positive sign as it indicates that ADEIA CORP is relying less on debt to finance its assets. However, the ratio of 0.47 in 2023 still suggests that a significant portion of the company's assets are financed by debt.

2. Debt-to-capital ratio:
- The debt-to-capital ratio shows a similar decreasing trend over the years, indicating that ADEIA CORP is gradually reducing its reliance on debt for capital structure. The ratio of 0.59 in 2023 implies that 59% of the company's capital is financed through debt.

3. Debt-to-equity ratio:
- The debt-to-equity ratio has also decreased over the years, which indicates that the company is becoming less leveraged and relying more on equity for financing. The ratio of 1.46 in 2023 suggests that ADEIA CORP has $1.46 in debt for every $1 of equity.

4. Financial leverage ratio:
- The financial leverage ratio has shown a decreasing trend from 2020 to 2023, indicating that the company is reducing its dependence on debt to finance its operations. The ratio of 3.10 in 2023 implies that ADEIA CORP's assets are financed 3.10 times by its equity.

Overall, the decreasing trend in these solvency ratios reflects ADEIA CORP's efforts to strengthen its financial position by reducing its reliance on debt and improving its leverage ratios over the years. It suggests a positive outlook for the company's long-term financial health and ability to meet its obligations.

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Coverage ratios

ADEIA CORP's interest coverage ratio has seen a declining trend over the past four years. In 2020, the company had a robust interest coverage ratio of 7.06, indicating that it could cover its interest expenses over seven times with its operating income. However, this ratio decreased to 3.05 in 2021 and further dropped to 3.38 in 2022. The latest available data for 2023 shows a further decline to 2.18, which suggests that the company's ability to cover its interest expenses with its operating income has weakened.

A decreasing trend in the interest coverage ratio can raise concerns about the company's financial health and its ability to meet its interest payment obligations. Investors and creditors may view a declining interest coverage ratio as a red flag, indicating potential difficulties in servicing debt and meeting financial obligations. Therefore, ADEIA CORP may need to closely monitor its interest coverage ratio and take necessary steps to improve its financial performance and strengthen its ability to meet its debt obligations in the future.