Autoliv Inc (ALV)

Autoliv Inc.'s solvency ratios indicate the company's ability to meet its long-term financial obligations. The trends in the ratios over the past five years are as follows:

1. Debt-to-assets ratio: Autoliv Inc. has shown a decreasing trend in its debt-to-assets ratio from 0.31 in 2019 to 0.22 in 2023. This suggests that the company has been reducing its reliance on debt to finance its assets, which can be interpreted positively as it indicates a stronger financial position.

2. Debt-to-capital ratio: The debt-to-capital ratio has fluctuated slightly over the years, with a slight increase from 0.40 in 2022 to 0.42 in 2023. This ratio indicates the proportion of debt used to finance the company's operations compared to equity. The recent increase suggests a slightly higher reliance on debt funding.

3. Debt-to-equity ratio: Autoliv Inc.'s debt-to-equity ratio has fluctuated over the years, with a significant decrease from 1.00 in 2020 to 0.73 in 2023. This decrease indicates a reduction in the level of financial risk associated with higher debt levels compared to equity.

4. Financial leverage ratio: The financial leverage ratio, which measures the company's total assets relative to equity, has shown fluctuations over the years. Although the ratio increased in 2023 compared to 2022, it is lower than in 2020, indicating a moderation in the company's financial leverage.

Overall, Autoliv Inc. has demonstrated improvements in its solvency position over the years, as indicated by the decreasing trends in the debt-to-assets and debt-to-equity ratios, although the debt-to-capital ratio showed a slight increase. The company's financial leverage has also shown fluctuations but remains within manageable levels. These ratios collectively suggest that Autoliv Inc. has been effectively managing its debt levels to maintain a solid solvency position.

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Coverage ratios

Autoliv Inc.'s interest coverage ratio has displayed a consistent trend over the past five years, reflecting the company's ability to comfortably meet its interest obligations. The ratio has ranged from a low of 6.94 in 2020 to a high of 12.16 in 2021, indicating varying levels of earnings available to cover interest expenses. The most recent figure of 11.26 for 2023 suggests a solid ability to service its interest payments. Overall, Autoliv Inc. has maintained a healthy interest coverage ratio, with the fluctuations demonstrating the importance of monitoring the company's profitability and financial health.