Baxter International Inc (BAX)
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 | 3.70 | 3.37 | 4.85 | 3.69 | 2.30 |
Based on the provided data, Baxter International Inc has consistently maintained a very strong solvency position over the years, as indicated by its low debt-to-assets, debt-to-capital, and debt-to-equity ratios. These ratios measure the proportion of the company's assets, capital, and equity that are financed by debt, respectively.
The debt-to-assets ratio has been consistently at 0.00 from 2020 to 2024, indicating that the company has not relied on debt to finance its assets during this period. Similarly, the debt-to-capital and debt-to-equity ratios have also been at 0.00 throughout the same period, demonstrating that Baxter International's capital structure is primarily equity-based.
However, it is worth noting that the financial leverage ratio, which measures the extent to which the company uses debt in its capital structure, has fluctuated over the years. While it was relatively low at 2.30 in 2020, it increased to 4.85 in 2022 before decreasing to 3.37 in 2023 and then slightly rising to 3.70 in 2024. This indicates that the company's reliance on debt to support its operations increased in 2022 but tapered off in the subsequent years.
Overall, Baxter International Inc's solvency ratios reflect a prudent and conservative approach to managing its debt levels and capital structure, which may help mitigate financial risks and support long-term sustainability.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | -0.30 | 0.81 | -5.64 | 8.48 | 12.78 |
Based on the provided data for Baxter International Inc's interest coverage ratio, we observe the following trend:
- As of December 31, 2020, the interest coverage ratio was 12.78, indicating that the company's operating income was sufficient to cover its interest expenses approximately 12.78 times over.
- By December 31, 2021, the interest coverage ratio decreased to 8.48, suggesting a slight weakening in the company's ability to cover its interest obligations from operating income.
- However, there was a significant decline in the interest coverage ratio to -5.64 as of December 31, 2022. A negative ratio implies that the company's operating income was insufficient to cover its interest expenses, raising concerns about potential financial distress.
- The ratio improved slightly to 0.81 by December 31, 2023, but still remained below the ideal threshold, indicating lingering challenges in meeting interest payments from operating profits.
- Subsequently, by December 31, 2024, the interest coverage ratio further deteriorated to -0.30, reflecting a worsening financial position where the company's operating income may not be adequate to cover its interest charges.
In summary, the trend in Baxter International Inc's interest coverage ratio over the years shows fluctuations and a concerning downward trajectory, indicating potential financial difficulties in meeting interest obligations from operating income. This trend warrants further investigation and proactive financial management to address the company's solvency and financial stability.