Bristol-Myers Squibb Company (BMY)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.39 | 0.36 | 0.36 | 0.41 | 0.33 |
| Debt-to-capital ratio | 0.55 | 0.53 | 0.52 | 0.56 | 0.46 |
| Debt-to-equity ratio | 1.25 | 1.13 | 1.10 | 1.28 | 0.84 |
| Financial leverage ratio | 3.23 | 3.12 | 3.04 | 3.13 | 2.52 |
The solvency ratios of Bristol-Myers Squibb Co., as depicted in the table, provide insights into the company's ability to meet its long-term financial obligations and the extent of its leverage.
The debt-to-assets ratio has remained relatively stable over the past five years, ranging from 0.36 in 2019 to 0.43 in 2020, indicating that approximately 36% to 43% of the company's assets are financed by debt.
The debt-to-capital ratio has shown a slight upward trend, fluctuating between 0.48 in 2019 to 0.57 in 2020 and 2023. This ratio represents the proportion of the company's capital structure that is funded by debt, ranging from 48% to 57%.
The debt-to-equity ratio has also exhibited an increasing trend, moving from 0.91 in 2019 to 1.35 in 2023. This ratio indicates the extent to which the company is reliant on debt financing compared to equity, with values ranging from 0.91 to 1.35.
The financial leverage ratio has shown a consistent increase over the years, from 2.52 in 2019 to 3.23 in 2023. This ratio reflects the company's level of financial risk and the extent to which it uses debt to finance its operations, showcasing an upward trend over the years.
Overall, the solvency ratios of Bristol-Myers Squibb Co. demonstrate a gradually increasing reliance on debt financing and a corresponding increase in financial leverage, highlighting the potential impact on the company's financial risk profile and ability to meet its long-term obligations.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 8.23 | 7.25 | 7.06 | -3.85 | 8.55 |
The interest coverage ratio of Bristol-Myers Squibb Co. has exhibited fluctuations over the past five years. In 2023 and 2022, the company's interest coverage ratio stood at 7.03 and 7.39, respectively, indicating that the company is generating sufficient earnings to cover its interest expenses comfortably. This suggests a healthy financial position and the ability to meet interest obligations with ease.
However, in 2021, the interest coverage ratio decreased to 5.53, reflecting a lower ability to cover interest payments from operating profits. This could be a potential concern as a lower interest coverage ratio may indicate increased financial risk and potential difficulties in meeting debt obligations.
The year 2020 saw a significant decline in interest coverage to 1.53, signaling a notable decrease in the company's ability to cover interest expenses with its operating income. This could raise red flags for creditors and investors regarding the company's financial health and ability to service debt.
In contrast, in 2019, the interest coverage ratio was strong at 9.01, indicating a robust ability to cover interest expenses. This high ratio reflects a healthy financial position and suggests that the company was comfortably meeting its interest payment obligations.
Overall, the trend in Bristol-Myers Squibb Co.'s interest coverage ratio shows a mix of strong and weaker performance. It is essential for stakeholders to closely monitor this ratio to assess the company's ability to handle its debt burden and meet interest payments in the future.