Avantor Inc (AVTR)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.27 | 0.41 | 0.44 | 0.50 | 0.49 |
| Debt-to-capital ratio | 0.35 | 0.50 | 0.55 | 0.62 | 0.65 |
| Debt-to-equity ratio | 0.54 | 1.00 | 1.22 | 1.66 | 1.82 |
| Financial leverage ratio | 2.03 | 2.47 | 2.77 | 3.31 | 3.70 |
Based on the provided solvency ratios for Avantor Inc, we can observe the following trends:
1. Debt-to-assets ratio:
- The debt-to-assets ratio has shown a decreasing trend from 0.49 in 2020 to 0.27 in 2024.
- This indicates that Avantor Inc has been reducing its reliance on debt to finance its assets over the years.
2. Debt-to-capital ratio:
- Similar to the debt-to-assets ratio, the debt-to-capital ratio has also exhibited a decreasing pattern from 0.65 in 2020 to 0.35 in 2024.
- This implies that Avantor Inc has been decreasing its debt relative to its capital structure, which is a positive sign for solvency.
3. Debt-to-equity ratio:
- The debt-to-equity ratio has experienced a significant decline from 1.82 in 2020 to 0.54 in 2024.
- This indicates that the company has been utilizing more equity financing compared to debt financing, which generally strengthens the financial position and reduces financial risk.
4. Financial leverage ratio:
- The financial leverage ratio has decreased steadily from 3.70 in 2020 to 2.03 in 2024.
- The declining trend in this ratio suggests that Avantor Inc has been effectively managing its capital structure and reducing its reliance on debt to generate profits.
In conclusion, the solvency ratios of Avantor Inc demonstrate a positive trend towards a healthier financial position, characterized by a decreasing reliance on debt and a stronger equity base, which can improve the company's ability to weather financial challenges and capitalize on future growth opportunities.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 96.86 | 2.44 | 4.20 | 4.46 | 1.20 |
Avantor Inc's interest coverage ratio has shown fluctuations over the years. The ratio was at 1.20 as of December 31, 2020, indicating that the company's operating income was only able to cover its interest expenses by a small margin. However, the ratio improved significantly to 4.46 as of December 31, 2021, suggesting that the company's ability to cover its interest payments had strengthened.
Subsequently, as of December 31, 2022, the interest coverage ratio remained healthy at 4.20, signaling that Avantor Inc continued to have a comfortable cushion to meet its interest obligations. However, there was a slight decline in the ratio to 2.44 as of December 31, 2023, which may indicate a potential decrease in the company's ability to cover its interest expenses.
Interestingly, the interest coverage ratio surged to 96.86 as of December 31, 2024, highlighting a substantial improvement in Avantor Inc's capacity to pay its interest charges. This exceptional ratio suggests a robust financial position where the company's operating income significantly surpasses its interest expenses, reducing the financial risk associated with debt repayment.
Overall, while there have been fluctuations in Avantor Inc's interest coverage ratio over the years, the company has shown a mix of strengths and potential areas for improvement in managing its interest obligations effectively.