Alkermes Plc (ALKS)

The solvency ratios of Alkermes plc over the past five years exhibit a stable and healthy financial position. The debt-to-assets ratio has shown consistency, ranging between 0.14 and 0.15, which indicates that a relatively low proportion of the company's assets are financed by debt. This implies that Alkermes plc has a strong asset base compared to its debt obligations.

Similarly, the debt-to-capital ratio has also demonstrated stability, with values fluctuating between 0.19 and 0.22. This ratio indicates the proportion of capital funded by debt, and the consistent values suggest a balanced capital structure with a moderate reliance on debt financing.

The debt-to-equity ratio for Alkermes plc has shown a decreasing trend over the five-year period, from 0.26 in 2019 to 0.24 in 2023. This trend signifies that the company has been reducing its reliance on debt in relation to equity, which is typically viewed positively by investors and creditors.

Lastly, the financial leverage ratio for Alkermes plc increased from 1.66 in 2019 to 1.78 in 2023, showing a slight rise in financial leverage. While this increase indicates a higher level of financial risk, the ratio remains within reasonable levels, indicating that the company's assets are effectively leveraged to generate returns for shareholders.

Overall, the solvency ratios of Alkermes plc reflect a prudent and balanced approach to managing its debt obligations, maintaining a solid financial position and stability over the analyzed period.

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Coverage ratios

Interest coverage is a financial metric that indicates a company's ability to meet its interest obligations with its earnings before interest and taxes (EBIT). In the case of Alkermes plc, the interest coverage ratio has shown a significant improvement over the past few years.

In 2019, the interest coverage ratio was not available, as indicated by the dash in the table. However, the ratio improved from -66.17 in 2020 to -3.32 in 2021, indicating a better ability to cover interest expenses with operating income. This improvement continued in 2022 when the interest coverage ratio increased to -26.29. The negative values suggest that Alkermes plc's earnings were insufficient to cover its interest expenses during those years.

It is important to note that negative interest coverage ratios can be a red flag for investors and creditors as they indicate that the company is not generating enough operating income to cover its interest payments. However, the improving trend in Alkermes plc's interest coverage ratio in recent years is a positive sign, suggesting a potential strengthening of the company's financial position. Further analysis and monitoring of this ratio in the future will be crucial to assess the company's ongoing ability to meet its interest obligations.