Duolingo Inc (DUOL)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 1.46 | 1.38 | 1.29 |
Duolingo Inc's solvency ratios indicate a stable financial position over the past three years. The debt-to-assets, debt-to-capital, and debt-to-equity ratios have consistently been at 0.00, suggesting that the company operates without any significant debt burden relative to its total assets, capital structure, and equity base.
The financial leverage ratio has increased gradually from 1.29 in 2021 to 1.46 in 2023. This indicates that the company has been utilizing more debt to finance its operations compared to its equity over the years. While an increase in the financial leverage ratio can potentially indicate higher financial risk, Duolingo's ratio remains at a moderate level.
Overall, Duolingo Inc's solvency ratios demonstrate a prudent approach to managing debt and maintaining a healthy balance between debt and equity in its capital structure.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|
| Interest coverage | — | -9.01 | -1,224.63 |
The interest coverage ratio for Duolingo Inc has shown significant improvement over the past three years. In 2021, the interest coverage ratio was very low at -1,224.63, indicating that the company's earnings before interest and taxes (EBIT) were not sufficient to cover its interest expenses. This raised concerns about the company's ability to meet its debt obligations.
In 2022, the interest coverage ratio improved to -9.01, although it was still negative. This suggests that Duolingo's EBIT increased, but it was still not enough to cover its interest payments comfortably.
However, in 2023, the interest coverage ratio is not provided, so it is difficult to assess the current financial health of the company from this particular ratio alone. It is important to consider other financial metrics and factors to get a more complete picture of Duolingo Inc's financial performance and its ability to meet its debt obligations.