Boston Scientific Corp (BSX)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 1.82 | 1.85 | 1.94 | 2.01 | 2.20 |
The solvency ratios of Boston Scientific Corp. show a trend of improvement over the past five years, indicating a strengthening financial position in terms of the company's ability to meet its financial obligations.
The debt-to-assets ratio has decreased from 0.33 in 2019 to 0.26 in 2023, suggesting that the company is relying less on debt to finance its assets. This indicates a more conservative approach to leverage and lower financial risk.
The debt-to-capital ratio and debt-to-equity ratio also demonstrate a declining trend over the same period. The debt-to-capital ratio has decreased from 0.42 in 2019 to 0.32 in 2023, indicating that a lower proportion of the company's capital structure is comprised of debt. Similarly, the debt-to-equity ratio has fallen from 0.72 in 2019 to 0.47 in 2023, signaling a healthier balance between debt and equity financing.
Additionally, the financial leverage ratio has shown a consistent decline from 2.20 in 2019 to 1.82 in 2023. This indicates that the company's reliance on debt to fund its operations has decreased, leading to a more stable financial structure.
Overall, the decreasing trend in these solvency ratios reflects positively on Boston Scientific Corp.'s financial health, suggesting that the company is becoming more financially stable and better positioned to weather economic downturns or unexpected challenges.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 8.84 | 3.51 | 3.52 | -0.22 | 3.21 |
The interest coverage ratio measures a company's ability to meet its interest obligations with its operating income. A higher interest coverage ratio indicates a better ability to cover interest expenses.
Reviewing the trend for Boston Scientific Corp.'s interest coverage ratio over the past five years, we note a fluctuating pattern. The ratio stood at 9.95 in 2023, significantly higher than the previous two years. This suggests that the company generated operating income nearly ten times greater than its interest expenses in 2023, indicating a strong ability to service its debt.
In 2022, the interest coverage ratio decreased to 4.42, although it remained above the 3.0 threshold commonly used as a benchmark for financial health. The ratio further improved in 2021, reaching 5.41, indicating a better ability to cover interest payments compared to the prior year.
However, in 2020, the interest coverage ratio dropped to 1.91, signaling a decrease in Boston Scientific Corp.'s ability to cover interest expenses with operating income. This could raise concerns about the company's financial stability and ability to service its debt obligations.
The ratio rebounded in 2019 to 3.93, although it remained below the levels seen in 2021 and 2023. Overall, while Boston Scientific Corp. demonstrated varying levels of interest coverage over the past five years, the significant improvement in 2023 suggests a stronger financial position and increased ability to meet interest obligations. It is advisable to monitor future trends in this ratio to assess the company's ongoing financial health and debt servicing capabilities.