Cencora Inc. (COR)

When analyzing Cencora Inc.'s solvency ratios over the past five years, several trends can be observed:

1. Debt-to-assets ratio: The company's debt-to-assets ratio has shown a decreasing trend from 0.08 in 2021 to 0.06 in 2024. This indicates that the proportion of assets financed by debt has decreased over the years, suggesting improved financial stability in terms of asset coverage by debt.

2. Debt-to-capital ratio: Cencora Inc.'s debt-to-capital ratio fluctuated over the years, peaking at 1.39 in 2020 and then gradually decreasing to 0.86 in 2024. The downward trend indicates that the company has been relying less on debt capital relative to total capital, which may signify a reduction in financial risk.

3. Debt-to-equity ratio: The debt-to-equity ratio has shown significant fluctuations, with values of 28.58 in 2021 and 5.90 in 2024. Such variation may suggest changes in the company's capital structure or financial strategies over the period.

4. Financial leverage ratio: Cencora Inc.'s financial leverage ratio has also displayed a decreasing trend from 256.71 in 2021 to 103.88 in 2024. This decline implies that the company has been reducing its reliance on debt to finance its operations, leading to a lower level of financial risk.

Overall, Cencora Inc. has demonstrated an improvement in its solvency position over the years as indicated by the declining trend in debt ratios and financial leverage ratio. These trends suggest that the company has been managing its debt levels effectively and strengthening its financial position.

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Coverage ratios

The interest coverage ratio for Cencora Inc. has exhibited significant fluctuations over the past five years. In 2024, the interest coverage ratio was 13.86, indicating that the company's earnings before interest and taxes (EBIT) were sufficient to cover its interest expenses 13.86 times over. This signifies a reasonable ability to meet its interest obligations.

However, the interest coverage ratio was substantially higher in 2023 at 275.38, suggesting an exceptionally strong ability to cover interest payments. This dramatic improvement may have been influenced by increased EBIT or reduced interest expenses during that year.

In 2022 and 2021, the interest coverage ratios remained healthy at 198.86 and 242.70 respectively, indicating a consistent ability to meet interest obligations comfortably.

Conversely, in 2020, the interest coverage ratio was -802.40, implying that the company's EBIT was insufficient to cover its interest payments, raising concerns about its financial health and ability to service its debt obligations during that period.

Overall, while the interest coverage ratio for Cencora Inc. has shown variability, the company has generally demonstrated a solid ability to cover its interest expenses in recent years, with occasional fluctuations that may require further investigation to assess the underlying causes.