Diodes Incorporated (DIOD)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| 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 | 1.33 | 1.36 | 1.51 | 1.77 | 2.05 |
Diodes Incorporated exhibits strong solvency ratios over the years as indicated by consistently low debt-to-assets, debt-to-capital, and debt-to-equity ratios of 0.00 across the years 2020 to 2024. These ratios suggest that the company operates with minimal debt relative to its assets and capital structure, indicating a low level of financial risk and a healthy balance sheet.
Additionally, the financial leverage ratio, which measures the extent of a company's financial leverage, has shown a declining trend from 2.05 in 2020 to 1.33 in 2024. This decreasing trend indicates that the company has been reducing its reliance on debt financing over the years while enhancing its financial stability and flexibility.
Overall, the solvency ratios of Diodes Incorporated demonstrate a conservative financial strategy with a focus on maintaining a strong financial position and minimizing financial risk, which bodes well for the company's long-term sustainability and growth prospects.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 22.93 | 43.96 | 48.59 | 42.99 | 11.28 |
Diodes Incorporated has exhibited a strong interest coverage ratio over the past five years. The interest coverage ratio measures the company's ability to meet its interest obligations on outstanding debt.
In December 2020, the interest coverage ratio stood at 11.28, indicating that the company generated 11.28 times the earnings needed to cover its interest expenses. This ratio improved significantly in the following years, reaching 42.99 by December 2021, and further increasing to 48.59, 43.96, and 22.93 in 2022, 2023, and 2024, respectively.
The substantial increase in the interest coverage ratio reflects Diodes Incorporated's efficient management of its debt burden and the company's ability to generate ample earnings to cover interest expenses. It suggests a strong financial position and profitability, indicating that the company is less vulnerable to financial risks associated with debt repayment.