Cohu Inc (COHU)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.03 | 0.06 | 0.08 | 0.29 | 0.32 |
| Debt-to-capital ratio | 0.03 | 0.07 | 0.10 | 0.38 | 0.42 |
| Debt-to-equity ratio | 0.04 | 0.08 | 0.12 | 0.61 | 0.72 |
| Financial leverage ratio | 1.21 | 1.32 | 1.43 | 2.13 | 2.23 |
Solvency ratios provide insight into a company's ability to meet its long-term financial obligations and manage its debt levels effectively. Let's analyze Cohu Inc's solvency ratios based on the data provided:
1. Debt-to-assets ratio:
- The debt-to-assets ratio measures the proportion of a company's assets that are financed with debt.
- Cohu Inc has shown a decreasing trend in this ratio over the five-year period, indicating a lower reliance on debt to finance its assets.
2. Debt-to-capital ratio:
- The debt-to-capital ratio reflects the proportion of a company's capital structure that is funded by debt.
- Similar to the debt-to-assets ratio, Cohu Inc has demonstrated a declining trend in this ratio, suggesting a decreased reliance on debt in its capital structure.
3. Debt-to-equity ratio:
- The debt-to-equity ratio compares a company's total debt to its shareholders' equity.
- Cohu Inc has also shown a decreasing trend in this ratio over the five-year period, indicating a lower level of debt relative to its equity.
4. Financial leverage ratio:
- The financial leverage ratio measures a company's level of debt relative to its equity and assets.
- Cohu Inc has consistently reduced its financial leverage ratio, reflecting improved financial stability and a stronger equity base compared to previous years.
Overall, Cohu Inc's solvency ratios have improved over the years, indicating a healthier financial position with reduced reliance on debt for financing its operations. This trend portrays the company's ability to manage its debt levels prudently and enhance its long-term financial stability.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 14.55 | 31.34 | 30.99 | 0.05 | -2.54 |
The interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt. A higher interest coverage ratio indicates a company is more capable of covering its interest expenses.
Looking at the trend in Cohu Inc's interest coverage ratio over the past five years, it is evident that the company has shown significant improvements in its ability to cover interest expenses. The ratio has been on an upward trajectory from 2019 to 2023, reaching 14.55 in 2023 compared to -2.54 in 2019.
In 2020, the interest coverage ratio dropped significantly to 0.05, indicating a potential strain on the company's ability to cover interest payments. However, Cohu Inc managed to significantly improve its interest coverage in the subsequent years, with ratios of 30.99 in 2021 and 31.34 in 2022, showcasing a strong recovery and financial health.
Overall, the trend in Cohu Inc's interest coverage ratio reflects a positive financial performance and an enhanced ability to meet its interest obligations, demonstrating improved financial stability and management of debt obligations over the years.