Aptiv PLC (APTV)

Solvency ratios

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Debt-to-assets ratio	0.33	0.25	0.30	0.23	0.23
Debt-to-capital ratio	0.47	0.35	0.42	0.33	0.34
Debt-to-equity ratio	0.89	0.54	0.73	0.49	0.51
Financial leverage ratio	2.67	2.12	2.48	2.16	2.22

The solvency ratios of Aptiv PLC show the company's ability to meet its long-term financial obligations.

The Debt-to-assets ratio remained relatively stable over the years, hovering between 0.23 and 0.33, indicating that Aptiv's debt as a proportion of its total assets has been well-managed.

The Debt-to-capital ratio increased from 0.34 in 2020 to 0.47 in 2024, pointing towards a higher reliance on debt for financing the company's operations relative to its capital. This may raise concerns regarding the company's financial risk.

The Debt-to-equity ratio fluctuated, ranging from 0.49 to 0.89. The increase in this ratio from 2022 to 2024 suggests a notable rise in debt compared to equity financing, implying higher financial leverage and potential risk.

The Financial leverage ratio shows the company's level of debt relative to its equity. Aptiv's ratio fluctuated between 2.12 and 2.67, indicating varying degrees of reliance on debt financing over the years.

In summary, while Aptiv has maintained a stable Debt-to-assets ratio, the increasing trend in the Debt-to-capital and Debt-to-equity ratios suggests a higher dependency on debt financing, potentially increasing financial risk and leverage for the company over the years.

Coverage ratios

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Interest coverage	6.96	4.54	4.26	5.61	12.30

The interest coverage ratio measures a company's ability to meet its interest payment obligations on its debt. Aptiv PLC's interest coverage ratio has shown a declining trend over the years, indicating a potential increase in the company's risk of defaulting on its interest payments. In 2020, the interest coverage ratio was 12.30, reflecting a strong ability to cover interest expenses. However, this ratio decreased to 5.61 in 2021, 4.26 in 2022, 4.54 in 2023, and then improved slightly to 6.96 in 2024.

A decreasing trend in the interest coverage ratio raises concerns about Aptiv's financial health and ability to service its debt obligations comfortably. It suggests that the company's earnings may not be sufficient to cover its interest expenses adequately. Investors and creditors may view this trend as a signal of increased financial risk and may closely monitor the company's ability to generate enough cash flow to meet its interest payments in the future.