Becton Dickinson and Company (BDX)
Solvency ratios
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.31 | 0.28 | 0.26 | 0.32 | 0.32 |
| Debt-to-capital ratio | 0.41 | 0.36 | 0.35 | 0.42 | 0.42 |
| Debt-to-equity ratio | 0.69 | 0.57 | 0.55 | 0.72 | 0.72 |
| Financial leverage ratio | 2.21 | 2.05 | 2.09 | 2.28 | 2.27 |
Becton Dickinson and Company's solvency ratios indicate the company's ability to meet its financial obligations and the extent to which it relies on debt financing.
The debt-to-assets ratio has shown a slight increasing trend from 0.26 in 2022 to 0.31 in 2024. This ratio suggests that around 31% of the company's assets are financed by debt in 2024. While the increase may indicate a higher reliance on debt, the ratio remains at a reasonable level, indicating that the company has a significant portion of assets financed by equity.
Similarly, the debt-to-capital and debt-to-equity ratios have also shown an increasing trend over the years, reaching 0.41 and 0.69 in 2024, respectively. These ratios indicate that 41% of the company's capital structure and 69% of its equity are derived from debt. The increasing trend in these ratios may indicate a higher level of leverage and potential financial risk, as the company relies more on debt financing.
The financial leverage ratio, which measures the company's total assets relative to equity, has also shown an upward trend, increasing from 2.05 in 2023 to 2.21 in 2024. This indicates that the company is using more debt to finance its assets relative to equity. While a higher financial leverage ratio can magnify returns, it also increases financial risk as debt obligations come with interest payments that need to be met.
In conclusion, Becton Dickinson and Company's solvency ratios show a moderate level of debt utilization to finance its operations and investments. The increasing trends in these ratios over the years suggest a gradual shift towards higher reliance on debt financing, which may warrant further monitoring to ensure the company's financial stability and ability to meet its debt obligations.
Coverage ratios
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 4.80 | 4.58 | 5.84 | 5.65 | 2.77 |
The interest coverage ratio of Becton Dickinson and Company has displayed a fluctuating trend over the past five years. It was 4.80 in 2024, indicating that the company generated earnings sufficient to cover its interest expenses 4.80 times. This ratio was slightly higher than the previous year's figure of 4.58. In 2022, the interest coverage ratio saw a significant improvement to 5.84, reflecting a stronger ability to meet interest payments compared to the preceding years. The ratio remained relatively stable at 5.65 in 2021 before increasing from 2.77 in 2020.
Overall, the upward trend in the interest coverage ratio indicates that Becton Dickinson has been gradually improving its ability to cover interest expenses with its operating earnings. However, it's important to assess the absolute level of the ratio against industry benchmarks and consider other aspects of the company's financial health to gain a more comprehensive understanding of its financial stability and performance.