BorgWarner Inc (BWA)

Solvency ratios

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020
Debt-to-assets ratio 0.27 0.28 0.23 0.23 0.26 0.26 0.24 0.24 0.24 0.25 0.26 0.25 0.26 0.26 0.26 0.23 0.23 0.26 0.27 0.18
Debt-to-capital ratio 0.40 0.41 0.35 0.36 0.39 0.39 0.36 0.36 0.36 0.38 0.38 0.37 0.38 0.39 0.40 0.37 0.37 0.37 0.37 0.26
Debt-to-equity ratio 0.68 0.68 0.54 0.56 0.64 0.64 0.56 0.56 0.57 0.60 0.60 0.60 0.61 0.65 0.65 0.58 0.58 0.59 0.60 0.35
Financial leverage ratio 2.53 2.46 2.32 2.42 2.48 2.45 2.29 2.30 2.35 2.37 2.34 2.37 2.39 2.48 2.54 2.51 2.49 2.29 2.24 2.01

Based on the solvency ratios of BorgWarner Inc provided, we can observe the following trends:

1. Debt-to-assets ratio: The company's debt-to-assets ratio has been relatively stable over the period analyzed, ranging from 0.18 to 0.28. This indicates that BorgWarner Inc has maintained a healthy balance between its debt and assets, with a lower ratio suggesting lower financial risk.

2. Debt-to-capital ratio: The debt-to-capital ratio also remained relatively stable, ranging from 0.26 to 0.41. This ratio reflects the proportion of capital that is debt-funded, and the stability suggests that BorgWarner Inc has not significantly changed its capital structure during the period.

3. Debt-to-equity ratio: BorgWarner Inc's debt-to-equity ratio fluctuated between 0.35 and 0.68. This ratio indicates the level of leverage the company is using to finance its operations, with a higher ratio suggesting higher financial risk. The fluctuation in this ratio may indicate varying levels of reliance on debt financing over time.

4. Financial leverage ratio: The financial leverage ratio, which measures the company's total assets to equity ratio, ranged from 2.01 to 2.53. This ratio gives an overall view of the company's financial leverage and risk, with a higher ratio indicating higher financial risk. BorgWarner Inc's financial leverage ratio also showed some fluctuations over the period.

Overall, while BorgWarner Inc's solvency ratios have shown some fluctuations, the company has generally maintained a balanced level of debt relative to its assets and capital. It is important for investors and stakeholders to monitor these ratios to assess the company's risk profile and financial stability.

Coverage ratios

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020
Interest coverage 5.52 12.84 13.31 13.68 13.43 16.25 16.68 15.54 15.82 11.73 11.22 9.57 9.84 13.80 18.45 32.92 77.25 98.00 72.83 82.47

The interest coverage ratio measures a company's ability to pay its interest expenses on outstanding debt. A higher interest coverage ratio indicates a company is more capable of meeting its interest obligations.

Analyzing BorgWarner Inc's interest coverage ratio over the past few years, we observe a declining trend. The ratio was relatively high in March 2020 at 82.47, indicating strong capacity to cover interest expenses. However, the ratio decreased to 5.52 by December 2024, signaling a significant decrease in the company's ability to cover its interest payments.

The decreasing trend in BorgWarner Inc's interest coverage ratio raises concerns about its ability to service its debt obligations. Investors and creditors may view a declining interest coverage ratio as a potential red flag, suggesting financial challenges or increased risk associated with the company's debt levels. It is essential for BorgWarner Inc to closely monitor and address this trend to ensure its long-term financial stability and sustainability.