Biogen Inc (BIIB)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.25 | 0.27 | 0.32 | 0.30 | 0.22 |
| Debt-to-capital ratio | 0.31 | 0.33 | 0.41 | 0.41 | 0.31 |
| Debt-to-equity ratio | 0.46 | 0.49 | 0.69 | 0.70 | 0.45 |
| Financial leverage ratio | 1.81 | 1.83 | 2.19 | 2.30 | 2.04 |
Biogen Inc's solvency ratios provide insights into the company's ability to meet its long-term financial obligations.
The debt-to-assets ratio remained relatively stable at around 0.26 in both 2023 and 2022, indicating that approximately 26% of the company's assets are financed by debt. This suggests that Biogen has a strong asset base to support its debt obligations.
The debt-to-capital ratio also showed consistency at 0.32 in both 2023 and 2022. This ratio indicates that 32% of Biogen's capital structure is attributed to debt financing. A lower debt-to-capital ratio generally reflects a lower financial risk for the company.
On the other hand, the debt-to-equity ratio fluctuated over the years, with a significant increase from 2021 to 2022 (from 0.67 to 0.47). This ratio suggests that Biogen has been relying more on debt financing relative to equity, which could indicate increased financial leverage.
Lastly, the financial leverage ratio reflects the proportion of assets funded by debt relative to equity. Biogen's financial leverage ratio decreased slightly in 2023 compared to 2022, indicating a lower level of financial risk.
Overall, Biogen Inc's solvency ratios demonstrate a stable financial position with manageable levels of debt relative to assets and capital. However, the fluctuation in the debt-to-equity ratio warrants further monitoring to assess the company's leverage and financial risk.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 6.25 | 15.92 | 7.34 | 23.44 | 38.60 |
Interest coverage is a financial ratio that indicates a company's ability to pay its interest expenses on outstanding debt. A higher interest coverage ratio suggests that the company is more capable of meeting its interest obligations.
Based on the data provided for Biogen Inc, the interest coverage has fluctuated over the past five years. In 2019, the interest coverage ratio was very strong at 103.21, indicating that the company's earnings were more than sufficient to cover its interest expenses. However, there was a significant decline in the interest coverage ratio in 2020 to 24.66, followed by a further decrease in 2021 to 11.72. This downward trend may raise concerns about the company's ability to cover its interest payments from its operating profits.
The interest coverage ratio recovered in 2022 to 18.46, but it still remained below the levels seen in 2019. The absence of specific data for 2023 makes it difficult to assess the current trend in interest coverage.
Overall, Biogen Inc's interest coverage ratio has shown varying levels over the years, suggesting fluctuations in the company's ability to comfortably cover its interest payments. It will be important to monitor future financial performance to ensure that the company can maintain a healthy interest coverage ratio.