Collegium Pharmaceutical Inc (COLL)

Based on the provided data for Collegium Pharmaceutical Inc, the solvency ratios paint a picture of a company with a very strong financial position in terms of debt management and capital structure:

1. Debt-to-assets ratio: This ratio measures the proportion of a company's assets financed by debt. Collegium Pharmaceutical Inc has consistently maintained a debt-to-assets ratio of 0.00 across all the reported years. This indicates that the company has not been heavily reliant on debt to finance its assets, which is a positive sign of financial stability and solvency.

2. Debt-to-capital ratio: The debt-to-capital ratio also reflects the extent to which a company's operations are funded by debt. Similar to the debt-to-assets ratio, Collegium Pharmaceutical Inc has maintained a debt-to-capital ratio of 0.00 throughout the period. This suggests that the company has been able to effectively manage its capital structure without relying on excessive debt, further signifying strong financial health.

3. Debt-to-equity ratio: The debt-to-equity ratio compares a company's total debt to its shareholders' equity, indicating the level of financial risk faced by the shareholders. Collegium Pharmaceutical Inc's debt-to-equity ratio remains at 0.00 for all the years reported, signaling that the company has not taken on significant debt relative to its equity. This implies a less risky financial position for the shareholders.

4. Financial leverage ratio: The financial leverage ratio measures the extent to which a company relies on debt financing. Collegium Pharmaceutical Inc's financial leverage ratio shows a slight increase from 3.46 in 2020 to 7.27 in 2024. While the ratio has increased over the years, it still remains within a moderate range. This indicates that the company has been gradually leveraging more debt compared to its equity, however, it is important to monitor this trend to ensure financial stability in the long term.

Overall, based on these solvency ratios, Collegium Pharmaceutical Inc appears to have a solid financial foundation with low debt levels, balanced capital structure, and effective debt management practices, all of which contribute to its financial stability and sound solvency position.

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Coverage ratios

Interest coverage ratio measures a company's ability to pay its interest expenses on outstanding debt. A higher ratio indicates that the company is more capable of meeting its interest obligations. Collegium Pharmaceutical Inc's interest coverage has shown fluctuations over the years:

- In December 31, 2020, the interest coverage ratio was 1.95, indicating that the company was generating enough operating income to cover its interest expenses.
- However, by December 31, 2021, the interest coverage ratio decreased to 0.84, suggesting a decline in the company's ability to cover its interest payments with its operating income.
- The trend continued to worsen in December 31, 2022, with an interest coverage ratio of 0.54, indicating a higher risk of defaulting on its debt obligations.
- Fortunately, there was an improvement by December 31, 2023, with the interest coverage ratio increasing to 1.91, showing some recovery in the company's ability to cover its interest costs.
- By December 31, 2024, the interest coverage ratio further improved to 2.33, indicating a stronger ability to meet its interest expenses with operating income.

Overall, Collegium Pharmaceutical Inc's interest coverage ratio has been volatile in recent years, experiencing both declines and improvements. It would be important for stakeholders to closely monitor this ratio to assess the company's financial health and ability to manage its debt obligations effectively.