Benchmark Electronics Inc (BHE)

Based on the provided data for Benchmark Electronics Inc, it is evident that the solvency ratios reflect a strong financial position with minimal financial leverage.

1. Debt-to-assets ratio: The ratio indicates the proportion of a company's assets financed by debt. Benchmark Electronics Inc consistently shows a Debt-to-assets ratio of 0.00 across the years 2020 to 2024. This signifies that the company's assets are primarily financed through equity rather than debt, indicating a low financial risk associated with debt.

2. Debt-to-capital ratio: This ratio measures the proportion of a company's capital structure that is debt. Similar to the Debt-to-assets ratio, Benchmark Electronics Inc maintains a Debt-to-capital ratio of 0.00 from 2020 to 2024. This reflects a capital structure where debt plays a minimal role, further emphasizing the company's conservative approach to financing.

3. Debt-to-equity ratio: The Debt-to-equity ratio assesses the balance between a company's debt and equity financing. Once again, Benchmark Electronics Inc displays a Debt-to-equity ratio of 0.00 consistently from 2020 to 2024. This ratio implies that the company relies more on equity financing than debt, indicating a robust financial standing and lower debt dependency.

4. Financial leverage ratio: The financial leverage ratio measures the extent to which a company utilizes debt in its capital structure. Benchmark Electronics Inc's Financial leverage ratio has ranged from 1.76 to 2.17 between 2020 and 2023 but decreased to 1.92 in 2024. While there is a slight increase in leverage over the years, the ratio remains relatively moderate, suggesting that the company has effectively managed its debt levels without being excessively leveraged.

In summary, the solvency ratios of Benchmark Electronics Inc demonstrate a prudent and conservative financial strategy characterized by low debt levels and a solid equity base. The company's consistent low debt ratios and moderate financial leverage ratio indicate a stable and sustainable financial position with minimal risk associated with debt financing.

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Coverage ratios

The interest coverage ratio for Benchmark Electronics Inc has shown fluctuations over the past five years. In December 2020, the ratio was at 3.07, indicating that the company's operating income was able to cover its interest expenses approximately three times over.

Over the next few years, there was a noticeable improvement in the interest coverage ratio. By December 2021, the ratio had increased to 6.36, indicating a stronger ability to cover interest payments with operating income. This positive trend continued into December 2022, with the ratio further improving to 7.54, suggesting a more robust financial position with a higher capacity to meet interest obligations.

However, in December 2023, there was a slight decline in the interest coverage ratio to 3.55, which may raise concerns about the company's ability to comfortably cover its interest expenses with operating income. It is important for the company to closely monitor this ratio and address any underlying issues that may have led to the decrease.

By December 2024, the interest coverage ratio improved to 4.12, indicating a recovery from the dip in the previous year. Overall, while the company has shown fluctuations in its interest coverage ratio, the general trend has been positive, with improvements in the company's ability to meet its interest obligations with operating income.