Avanos Medical Inc (AVNS)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 1.39 | 1.37 | 1.38 | 1.26 | 1.33 |
Avanos Medical Inc shows consistently low values for its solvency ratios based on the provided data. The debt-to-assets ratio, debt-to-capital ratio, and debt-to-equity ratio are all reported as 0.00 for the years 2020 to 2024. This indicates that the company has not utilized debt heavily to finance its assets, capital, or operations during this period.
However, the financial leverage ratio shows a slight increase from 1.33 in 2020 to 1.39 in 2024. This ratio measures the extent to which the company relies on debt to finance its operations. While the increase is minimal, it suggests a slight uptick in leveraging for the company, although the overall level of leverage remains relatively low.
Overall, the solvency ratios indicate that Avanos Medical Inc has maintained a conservative approach to debt management, with low levels of leverage and debt utilization throughout the years analyzed.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | -32.06 | 0.30 | 3.67 | -8.91 | -2.88 |
Interest coverage ratio measures a company's ability to meet its interest obligations on its outstanding debt. A higher ratio indicates a stronger ability to cover interest expenses with operating income.
Analyzing the interest coverage ratios of Avanos Medical Inc for the past five years, the trend shows fluctuations with significant variances.
1. As of December 31, 2020, the interest coverage ratio was -2.88. This indicates that the company's operating income was insufficient to cover its interest expenses, suggesting a potential financial risk.
2. The ratio further deteriorated by the end of December 31, 2021, with a notable decrease to -8.91. This indicates a worsening financial position in terms of meeting interest payments.
3. However, the situation improved by December 31, 2022, as the interest coverage ratio increased to 3.67. This suggests a positive development, as the company's operating income became more sufficient to cover interest obligations.
4. By December 31, 2023, the ratio declined sharply to 0.30, indicating a significant decrease in the company's ability to cover interest expenses with its operating income, raising concerns about financial stability.
5. The most recent data as of December 31, 2024, shows a substantial decrease in the interest coverage ratio to -32.06, reflecting a severe deterioration. This suggests a critical situation where the company's operating income is significantly insufficient to cover its interest payments.
Overall, the trend in Avanos Medical Inc's interest coverage ratio demonstrates volatility and inconsistency, with periods of both improvement and deterioration. Investors and stakeholders should closely monitor this ratio as it indicates the company's ability to manage its debt obligations and financial risk.