Amphastar P (AMPH)

The solvency ratios of Amphastar P indicate the company's ability to meet its long-term financial obligations.

1. Debt-to-assets ratio:
- The debt-to-assets ratio has increased from 0.07 in 2020 to 0.39 in 2024. This signifies a higher proportion of the company's assets financed by debt over the years. Management should closely monitor this trend to ensure it does not lead to financial distress.

2. Debt-to-capital ratio:
- The debt-to-capital ratio has shown a similar upward trend, rising from 0.10 in 2020 to 0.46 in 2024. This indicates an increasing reliance on debt funding within the company’s capital structure, which may raise concerns regarding financial stability.

3. Debt-to-equity ratio:
- The debt-to-equity ratio has experienced a significant surge from 0.11 in 2020 to 0.84 in 2024. This indicates a substantial increase in financial leverage and suggests that a significant portion of the company's assets are funded through debt, potentially posing higher risks to equity investors.

4. Financial leverage ratio:
- Similarly, the financial leverage ratio has increased from 1.57 in 2020 to 2.15 in 2024, signifying a higher degree of financial risk carried by the company. This indicates that the company is relying more on debt to finance its operations, which could lead to challenges in meeting debt obligations in the future.

In summary, Amphastar P's solvency ratios have shown a consistent trend of increasing leverage and dependency on debt financing over the years. Management should carefully assess the impact of this trend on the company's financial health and consider strategies to improve solvency and reduce potential risks associated with high debt levels.

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Coverage ratios

Interest coverage ratio is a key financial metric used to evaluate a company's ability to meet its interest obligations on outstanding debt. A higher ratio indicates that the company is more capable of servicing its debt from its operating earnings.

For Amphastar P, the interest coverage ratio has fluctuated over the last five years, ranging from 7.24 to 94.50. In December 31, 2021, the company's interest coverage ratio stood at a high 94.50, indicating that the company's operating earnings were sufficient to cover its interest expenses nearly 95 times over.

However, the ratio dropped significantly to 7.24 by December 31, 2023, which suggests that the company's ability to cover its interest payments decreased substantially. This could raise concerns about the company's financial health and its ability to meet its debt obligations.

Overall, from 2020 to 2024, the interest coverage ratio for Amphastar P experienced both highs and lows, signaling fluctuations in the company's ability to manage its interest expenses with its operating earnings. It would be important for stakeholders to monitor this ratio closely to assess the company's financial stability and debt servicing capability.