Aptiv PLC (APTV)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.25 | 0.30 | 0.23 | 0.23 | 0.30 |
| Debt-to-capital ratio | 0.35 | 0.42 | 0.33 | 0.34 | 0.51 |
| Debt-to-equity ratio | 0.54 | 0.73 | 0.49 | 0.51 | 1.04 |
| Financial leverage ratio | 2.12 | 2.48 | 2.16 | 2.22 | 3.52 |
The solvency ratios of Aptiv PLC indicate the company's ability to meet its long-term financial obligations and the extent to which it relies on debt financing.
1. Debt-to-assets ratio:
The debt-to-assets ratio has been relatively stable over the years, with a slight decrease from 0.32 in 2019 to 0.25 in 2023. This ratio indicates that 25% of the company's total assets are financed through debt, signaling a healthy balance between debt and assets.
2. Debt-to-capital ratio:
Aptiv's debt-to-capital ratio has also shown a declining trend over the years, indicating improved capital structure management. The ratio decreased from 0.53 in 2019 to 0.35 in 2023, demonstrating a decrease in the proportion of debt used to finance the company's operations relative to its total capital.
3. Debt-to-equity ratio:
The debt-to-equity ratio has shown a consistent improvement, declining from 1.14 in 2019 to 0.54 in 2023. This indicates that the company relies less on debt financing as compared to equity, which is a positive indication of financial health and lower financial risk.
4. Financial leverage ratio:
The financial leverage ratio has also displayed a decreasing trend, reflecting a lower reliance on debt to support the company's operations. A decrease from 3.52 in 2019 to 2.12 in 2023 signals an improved ability to generate earnings to cover interest expenses and debt obligations.
Overall, the solvency ratios of Aptiv PLC demonstrate a prudent approach to managing debt and capital structure, with decreasing reliance on debt financing over the years. This indicates a stronger financial position and improved ability to meet long-term financial commitments, making the company more resilient to economic fluctuations and risks.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 4.54 | 4.26 | 5.61 | 12.30 | 7.84 |
The interest coverage ratio for Aptiv PLC has varied over the past five years. The ratio measures the company's ability to meet its interest payments on outstanding debt with its operating income.
In 2023, the interest coverage ratio was 8.45, which indicates that the company's operating income was able to cover its interest expenses 8.45 times over. This represents an improvement compared to the previous year, suggesting that Aptiv PLC had a stronger ability to service its debt in 2023.
Looking at the trend over the five-year period, the interest coverage ratio has generally been healthy, staying above 4.72 each year. This demonstrates that Aptiv PLC has consistently generated sufficient operating income to comfortably meet its interest obligations.
The highest interest coverage ratio of 9.53 was recorded in 2019, indicating a peak performance in terms of the company's ability to cover its interest expenses that year. Overall, the trend in interest coverage reflects a positive financial position for Aptiv PLC, as the company has shown a strong capacity to manage its debt obligations and generate sustainable operating income.