Alkermes Plc (ALKS)

The solvency ratios of Alkermes Plc indicate a consistently low level of debt relative to its assets, capital, and equity over the years.

The Debt-to-assets ratio remained stable at around 0.14 to 0.15 from 2020 to 2022, slightly decreasing to 0.13 in 2023, and reaching 0.00 in 2024. This suggests that the company has a low level of debt in relation to its total assets, indicating a strong financial position regarding asset coverage.

Similarly, the Debt-to-capital ratio also exhibited a stable trend, increasing slightly from 0.20 in 2020 to 0.22 in 2022, before decreasing to 0.19 in 2023, and eventually dropping to 0.00 in 2024. This indicates that the company has been managing its debt effectively in relation to its capital, which includes both debt and equity.

The Debt-to-equity ratio remained relatively constant at around 0.26 to 0.28 from 2020 to 2022, showing a slight decrease to 0.24 in 2023, and falling to 0.00 in 2024. This implies that the company has a low level of debt compared to its equity, reflecting a conservative approach to leverage and a strong financial position in terms of equity cushion.

The Financial leverage ratio, which measures the extent to which the company is using debt to finance its operations, decreased from 1.83 in 2020 to 1.40 in 2024. This reduction highlights a decreasing reliance on debt financing over the years, indicating a prudent financial strategy and improved financial stability.

Overall, based on the solvency ratios analyzed, Alkermes Plc appears to have a solid financial foundation with a conservative debt structure and effective management of leverage, providing a reassuring indication of the company's ability to meet its financial obligations.

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Coverage ratios

Alkermes Plc's interest coverage ratio has shown fluctuations over the past five years. In December 2020, the interest coverage ratio was at a concerning -10.15, indicating that the company's operating income was insufficient to cover its interest expenses. There was a slight improvement in December 2021, with the ratio increasing to -2.50 but still remaining in negative territory.

However, there was a significant improvement in December 2022, as the interest coverage ratio improved to -11.83. This showed that the company's operating income was becoming better positioned to cover its interest obligations. By December 2023, the ratio turned positive, reaching 12.21, indicating a healthy level of coverage. Furthermore, in December 2024, the interest coverage ratio increased significantly to 18.63, demonstrating a strong ability to cover interest payments.

Overall, Alkermes Plc has shown a positive trend in its interest coverage ratio over the past few years, moving from financial distress to a position of financial strength. This improvement suggests that the company's ability to meet its interest obligations has strengthened, which may be a positive sign for its financial stability and creditworthiness.