Avantor Inc (AVTR)
Solvency ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.27 | 0.37 | 0.38 | 0.39 | 0.41 | 0.41 | 0.43 | 0.43 | 0.44 | 0.45 | 0.47 | 0.49 | 0.50 | 0.45 | 0.50 | 0.47 | 0.49 | 0.51 | 0.51 | 0.52 |
| Debt-to-capital ratio | 0.35 | 0.46 | 0.47 | 0.48 | 0.50 | 0.51 | 0.53 | 0.53 | 0.55 | 0.56 | 0.58 | 0.61 | 0.62 | 0.57 | 0.65 | 0.62 | 0.65 | 0.66 | 0.67 | 0.67 |
| Debt-to-equity ratio | 0.54 | 0.84 | 0.89 | 0.94 | 1.00 | 1.04 | 1.11 | 1.15 | 1.22 | 1.29 | 1.41 | 1.56 | 1.66 | 1.35 | 1.88 | 1.64 | 1.82 | 1.98 | 1.99 | 2.07 |
| Financial leverage ratio | 2.03 | 2.31 | 2.34 | 2.39 | 2.47 | 2.51 | 2.61 | 2.68 | 2.77 | 2.86 | 3.01 | 3.17 | 3.31 | 2.97 | 3.77 | 3.47 | 3.70 | 3.89 | 3.88 | 4.01 |
Solvency ratios are crucial indicators of a company's ability to meet its long-term financial obligations. Let's analyze the solvency ratios of Avantor Inc based on the provided data.
1. Debt-to-Assets Ratio: This ratio shows the proportion of a company's assets that are financed by debt. Avantor Inc's Debt-to-Assets ratio has been gradually decreasing from 0.52 in March 2020 to 0.27 in December 2024. This indicates that the company has been reducing its reliance on debt to finance its assets over the years.
2. Debt-to-Capital Ratio: The Debt-to-Capital ratio reflects the percentage of a company's capital that is financed through debt. Avantor Inc's Debt-to-Capital ratio has also shown a decreasing trend, declining from 0.67 in March 2020 to 0.35 in December 2024. This suggests that the company has been progressively reducing its debt component in its overall capital structure.
3. Debt-to-Equity Ratio: The Debt-to-Equity ratio compares a company's total debt to its shareholders' equity. Avantor Inc's Debt-to-Equity ratio has decreased significantly from 2.07 in March 2020 to 0.54 in December 2024, indicating a stronger financial position and a lower level of debt relative to equity over the years.
4. Financial Leverage Ratio: This ratio measures the extent to which a company uses debt to finance its operations. Avantor Inc's Financial Leverage ratio has also witnessed a decline, falling from 4.01 in March 2020 to 2.03 in December 2024. This signals that the company has been reducing its reliance on debt financing and improving its financial leverage position.
Overall, based on the analysis of Avantor Inc's solvency ratios, it can be observed that the company has been effectively managing its debt levels and enhancing its financial stability and resilience over the years. It indicates a positive trend towards a stronger financial position and lower risk of default in meeting its long-term obligations.
Coverage ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 96.58 | 2.63 | 2.72 | 2.22 | 2.44 | 2.61 | 2.89 | 3.79 | 4.20 | 4.18 | 4.26 | 4.40 | 4.46 | 4.01 | 2.55 | 1.79 | 1.20 | 1.24 | 1.60 | 1.25 |
The interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt. A higher interest coverage ratio indicates that the company is more capable of servicing its debt obligations. Looking at the data provided for Avantor Inc's interest coverage over the past few quarters, there is a noticeable improvement in the ratio trend.
From March 31, 2020, to December 31, 2021, the interest coverage ratio steadily increased from 1.25 to 4.46, showing a positive trend of the company's ability to cover its interest expenses with operating income. This upward trend continued through most of 2022, with the ratio remaining above 4.
However, starting from June 30, 2023, there was a slight decline in the interest coverage ratio, dropping to 2.89 by the end of the quarter. The trend continued to decrease, with the ratio falling to 2.22 by March 31, 2024. This decrease in the ratio could indicate a potential strain on Avantor's ability to cover its interest payments with operating income during that period.
The significant spike to 96.58 in the interest coverage ratio by December 31, 2024, raises questions about the accuracy of the data or potential anomalies. Such a drastic deviation from the previous trend warrants further investigation to ensure data reliability and to assess any potential impacts on the company's financial health.
In conclusion, while Avantor Inc has shown an overall positive trend in its interest coverage ratio, the sudden spike in the ratio in December 2024 requires a closer look to understand the underlying reasons behind such a significant increase. Monitoring and analyzing changes in the interest coverage ratio over time is crucial for assessing the company's financial stability and debt servicing capacity.