Biomarin Pharmaceutical Inc (BMRN)

The solvency ratios of Biomarin Pharmaceutical Inc, namely the Debt-to-assets ratio, Debt-to-capital ratio, Debt-to-equity ratio, and Financial leverage ratio, indicate the company's ability to meet its financial obligations and the extent to which it relies on debt to finance its operations.

1. Debt-to-assets ratio: This ratio shows the proportion of the company's assets financed by debt. Biomarin's Debt-to-assets ratio has fluctuated over the years but has generally been low, indicating a conservative level of debt relative to its total assets. The ratio decreased from 0.20 in June 2020 to 0.09 by December 2024, suggesting improved asset coverage against debt during this period.

2. Debt-to-capital ratio: This ratio measures the percentage of the company's capital structure funded by debt. Biomarin's Debt-to-capital ratio has also displayed a decreasing trend, indicating a reduced dependency on debt financing over the years. The ratio declined from 0.25 in June 2020 to 0.10 by December 2024, reflecting a more balanced capital structure with a higher proportion of equity.

3. Debt-to-equity ratio: The Debt-to-equity ratio signifies the relationship between the company's debt and equity financing. Biomarin's Debt-to-equity ratio has shown a similar decreasing pattern, indicating a strengthening equity position relative to debt. The company reduced its ratio from 0.33 in June 2020 to 0.11 by December 2024, showcasing a favorable shift towards equity financing.

4. Financial leverage ratio: This ratio quantifies the extent to which the company uses debt in its capital structure. Biomarin's Financial leverage ratio has been relatively stable over the years, suggesting a consistent level of leverage. The ratio fluctuated within a narrow range, maintaining a healthy level of financial leverage between 1.24 and 1.64, with a downward trend observed towards the end of the analyzed period.

Overall, the solvency ratios of Biomarin Pharmaceutical Inc demonstrate a prudent approach to managing its financial obligations, with a decreasing trend in debt reliance and an improvement in the company's overall solvency position.

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Coverage ratios

Interest coverage is a financial metric that indicates a company's ability to meet its interest obligations on outstanding debt. It is calculated by dividing the company's earnings before interest and taxes (EBIT) by its interest expense. A higher interest coverage ratio indicates that the company is more capable of covering its interest payments.

Analyzing the interest coverage of Biomarin Pharmaceutical Inc based on the provided data reveals fluctuations in the company's ability to cover its interest expenses over the given periods. From March 2020 to December 2021, Biomarin experienced negative interest coverage ratios, indicating that its EBIT was insufficient to cover its interest expenses, raising concerns about its financial health and debt servicing capability during those periods.

However, starting from March 2022, the interest coverage improved significantly, reflecting a positive trend in the company's ability to comfortably cover its interest obligations. The interest coverage ratio increased steadily over the subsequent quarters, reaching a peak of 40.91 by December 2024, suggesting a strong financial position and a robust capacity to service its debt obligations.

Overall, the trend in Biomarin Pharmaceutical Inc's interest coverage ratio indicates a period of financial strain followed by a notable recovery, demonstrating an improvement in the company's ability to meet its interest payments and suggesting a more stable financial outlook moving forward.