Baxter International Inc (BAX)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| 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 | 3.37 | 4.85 | 3.69 | 2.30 | 2.31 |
Solvency ratios provide insights into a company's ability to meet its long-term financial obligations. Baxter International Inc.'s solvency ratios have shown some fluctuations over the past five years.
The debt-to-assets ratio measures the proportion of a company's assets financed by debt. Baxter's debt-to-assets ratio decreased from 0.59 in 2022 to 0.49 in 2023, indicating a lower reliance on debt to fund its assets.
The debt-to-capital ratio reflects the percentage of a company's capital structure that is funded by debt. Baxter's debt-to-capital ratio also decreased from 0.74 in 2022 to 0.62 in 2023, suggesting a more conservative capital structure.
The debt-to-equity ratio compares a company's total debt to its shareholders' equity. Baxter's debt-to-equity ratio decreased significantly from 2.85 in 2022 to 1.64 in 2023, indicating less reliance on debt and a stronger equity position.
The financial leverage ratio measures the degree of financial leverage in a company's capital structure. Baxter's financial leverage ratio decreased from 4.85 in 2022 to 3.37 in 2023, showing a reduction in leverage and potential financial risk.
Overall, Baxter International Inc. has improved its solvency position in 2023 compared to the previous year, with lower debt ratios and a healthier capital structure. These trends suggest a stronger ability to meet its long-term financial obligations and may indicate improved financial stability.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 6.12 | -4.70 | 8.12 | 9.39 | 9.65 |
The interest coverage ratio for Baxter International Inc. has shown a declining trend over the past five years. In 2019, the interest coverage ratio was at its highest at 24.96, indicating that the company's operating income was nearly 25 times its interest expense, demonstrating a strong ability to meet its interest obligations.
However, since then, the interest coverage ratio has been steadily decreasing. By the end of 2023, the interest coverage ratio had dropped to 0.82, signaling that Baxter International Inc. may be facing challenges in generating enough operating income to cover its interest expenses.
This declining trend in the interest coverage ratio raises concerns about the company's financial health and ability to service its debt effectively. It suggests that Baxter International Inc. may need to focus on improving its operating efficiency and profitability to better manage its interest obligations in the future.