Bristol-Myers Squibb Company (BMY)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.51 | 0.39 | 0.36 | 0.36 | 0.41 |
| Debt-to-capital ratio | 0.74 | 0.55 | 0.53 | 0.52 | 0.56 |
| Debt-to-equity ratio | 2.91 | 1.25 | 1.13 | 1.10 | 1.28 |
| Financial leverage ratio | 5.67 | 3.23 | 3.12 | 3.04 | 3.13 |
The solvency ratios of Bristol-Myers Squibb Company indicate its ability to meet its long-term financial obligations.
- The Debt-to-assets ratio has shown a slight fluctuation over the years, decreasing from 0.41 in 2020 to 0.36 in 2021 and 2022, then increasing to 0.39 in 2023 before rising notably to 0.51 in 2024. This suggests that the company's level of debt in relation to its total assets has increased significantly in 2024, which may raise concerns about its asset coverage.
- The Debt-to-capital ratio has also displayed some variability, declining from 0.56 in 2020 to 0.52 in 2021, then hovering around 0.53 to 0.55 in 2022 and 2023 before jumping to 0.74 in 2024. This increase in 2024 indicates that a larger proportion of the company's capital is being financed through debt, which could lead to higher financial risk.
- The Debt-to-equity ratio illustrates a concerning trend as it rose from 1.28 in 2020 to 2.91 in 2024. This significant increase indicates that Bristol-Myers Squibb is increasingly relying on debt financing compared to equity, potentially signaling higher financial leverage and risk.
- The Financial leverage ratio has also shown an upward trend, rising from 3.13 in 2020 to 5.67 in 2024. This indicates that the company's reliance on debt to finance its operations and growth has increased substantially, potentially magnifying volatility in earnings and exposing it to greater financial risk.
In conclusion, the solvency ratios of Bristol-Myers Squibb Company suggest a trend of increasing debt levels and financial leverage over the years, which may raise concerns about its long-term financial health and ability to weather economic challenges. Managing and monitoring these ratios will be crucial for maintaining a healthy balance between debt and equity financing.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | -6.45 | 8.23 | 7.25 | 7.06 | -3.85 |
Interest coverage ratio measures a company's ability to pay its interest expenses on outstanding debt. A higher ratio indicates a stronger ability to cover interest costs.
Bristol-Myers Squibb Company's interest coverage has shown fluctuations in recent years. In December 2020, the interest coverage ratio was negative at -3.85, indicating the company struggled to cover its interest expenses with its operating income during that period.
However, since then, there has been a positive trend with the interest coverage ratio improving to 7.06 in December 2021, 7.25 in December 2022, and further to 8.23 in December 2023. These increases suggest the company's earnings have improved and can comfortably cover its interest obligations.
Unfortunately, there was a notable drop in December 2024, with the interest coverage ratio falling to -6.45. This decline raises concerns about the company's ability to meet its interest payments with its operating income.
In summary, while Bristol-Myers Squibb Company has shown improvements in its interest coverage ratio in recent years, the significant drop in the latest year signals the need for close monitoring of the company's financial performance and debt management strategies going forward.