Alkermes Plc (ALKS)
Solvency ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.13 | 0.13 | 0.14 | 0.13 | 0.13 | 0.13 | 0.15 | 0.15 | 0.15 | 0.15 | 0.15 | 0.14 | 0.15 | 0.15 | 0.16 | 0.14 | 0.15 | 0.15 | 0.15 |
| Debt-to-capital ratio | 0.00 | 0.18 | 0.18 | 0.19 | 0.19 | 0.18 | 0.18 | 0.22 | 0.22 | 0.22 | 0.21 | 0.21 | 0.21 | 0.21 | 0.21 | 0.22 | 0.20 | 0.20 | 0.20 | 0.20 |
| Debt-to-equity ratio | 0.00 | 0.22 | 0.22 | 0.23 | 0.24 | 0.21 | 0.23 | 0.29 | 0.28 | 0.28 | 0.27 | 0.27 | 0.26 | 0.27 | 0.27 | 0.28 | 0.26 | 0.25 | 0.26 | 0.26 |
| Financial leverage ratio | 1.40 | 1.67 | 1.72 | 1.69 | 1.78 | 1.68 | 1.71 | 1.91 | 1.88 | 1.86 | 1.81 | 1.84 | 1.82 | 1.82 | 1.76 | 1.79 | 1.83 | 1.73 | 1.70 | 1.72 |
The solvency ratios of Alkermes Plc indicate the company's ability to meet its long-term financial obligations.
Debt-to-Assets Ratio: This ratio describes the proportion of the company's assets financed by debt. Alkermes Plc has maintained a relatively stable debt-to-assets ratio around 0.15 in recent quarters, indicating that only 15% of its total assets are funded by debt.
Debt-to-Capital Ratio: The debt-to-capital ratio measures the percentage of capital structure that is debt-financed. Alkermes Plc's debt-to-capital ratio has shown consistency around 0.20 to 0.22, implying that debt constitutes around 20% to 22% of its total capital structure.
Debt-to-Equity Ratio: This ratio demonstrates the extent to which the company is leveraged through debt relative to its equity. Alkermes Plc has maintained a stable debt-to-equity ratio in the range of 0.22 to 0.29, which indicates that the company has between 22% to 29% of its financing sourced from debt.
Financial Leverage Ratio: The financial leverage ratio measures the company's total debt relative to its equity. Alkermes Plc has shown fluctuations in its financial leverage ratio within the range of 1.40 to 1.91, suggesting variations in the company's debt levels compared to its equity over the periods analyzed.
Overall, Alkermes Plc appears to have a balanced mix of debt and equity in its capital structure, with moderate levels of debt relative to its assets and equity. The company's stable solvency ratios indicate a reasonable ability to meet its long-term financial obligations, but changes in these ratios over time should be monitored to assess any potential impact on the company's financial health and risk profile.
Coverage ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 19.38 | 12.50 | 10.36 | 15.79 | 12.21 | 11.00 | 6.33 | -9.65 | -11.83 | -12.62 | -9.94 | -5.84 | -2.50 | -6.60 | -4.22 | -7.58 | -10.15 | -4.75 | -8.82 | -8.89 |
The interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt with its operating income. A higher ratio indicates that the company is more capable of servicing its debt obligations.
Analyzing the interest coverage of Alkermes Plc based on the provided data reveals fluctuations over the period from March 31, 2020, to December 31, 2024. The interest coverage ratio was highly negative in the early period, indicating significant challenges in meeting interest payments from operating income.
Throughout 2020 and 2021, the interest coverage stayed consistently negative, suggesting that the company's operating income was insufficient to cover its interest expenses. This raised concerns about Alkermes Plc's financial health and ability to manage its debt obligations effectively.
However, starting from March 31, 2023, there was a notable improvement in the interest coverage ratio, turning positive and increasing steadily over successive quarters. This positive trend continued through the end of 2024, indicating an enhancement in the company's ability to cover its interest expenses using its operating income.
By December 31, 2024, the interest coverage ratio had significantly improved, reaching a relatively strong level of 19.38. This implies that the company's operating income was more than sufficient to meet its interest obligations, reflecting a healthier financial position and reduced risk of default due to debt servicing issues.
Overall, the analysis shows a positive transformation in Alkermes Plc's interest coverage ratio over the period under review, indicating a more stable financial footing and improved capacity to handle its debt burden effectively.