Axon Enterprise Inc. (AXON)
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 | 1.92 | 2.13 | 2.25 | 1.61 | 1.41 |
Axon Enterprise Inc. has consistently maintained a strong solvency position over the years, as indicated by its low debt-to-assets, debt-to-capital, and debt-to-equity ratios, all of which have been at 0.00 for the five years from 2020 to 2024. A debt-to-assets ratio of 0.00 suggests that the company has no debt relative to its total assets, indicating a low financial risk associated with debt obligations.
Additionally, the financial leverage ratio, which provides insight into the proportion of debt in the company's capital structure, shows a slight increase from 1.41 in 2020 to 2.25 in 2022, before declining to 1.92 in 2024. Despite the fluctuation, the financial leverage ratio remains at a moderate level, implying a balanced mix of debt and equity financing.
Overall, Axon Enterprise Inc.'s solvency ratios reflect a conservative financial policy with minimal reliance on debt for funding its operations and investments. This approach enhances the company's financial stability and resilience to economic uncertainties in the long term.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 54.75 | 23.16 | 1.90 | -6.49 | -129.50 |
The interest coverage ratio for Axon Enterprise Inc. has shown a significant improvement over the five-year period from 2020 to 2024.
In December 2020, the interest coverage ratio was -129.50, indicating that the company's operating income was insufficient to cover its interest expenses, raising a red flag in terms of financial stability.
By December 2021, the interest coverage ratio improved to -6.49, although it remained negative. This suggests that Axon was still facing challenges in meeting its interest obligations from operating earnings.
However, a positive trend emerges in the following years. In December 2022, the interest coverage ratio increased to 1.90, indicating that the company's operating income was just sufficient to cover its interest expenses. This improvement suggests that Axon was making progress towards a healthier financial position.
By December 2023, the interest coverage ratio further improved to 23.16, indicating a substantial increase in the company's ability to cover its interest payments with operating income. This significant improvement suggests a strengthening financial position and reduced default risk.
Finally, by December 2024, the interest coverage ratio rose to 54.75, exhibiting a robust financial health as the company significantly exceeded its interest obligations with its operating income. This trend indicates a strong ability to service debt and suggests a more secure position for Axon Enterprise Inc. going forward.