Duolingo Inc (DUOL)
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 | — |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | — |
| Financial leverage ratio | 1.58 | 1.46 | 1.38 | 1.29 | — |
Duolingo Inc's solvency ratios indicate a very healthy financial position with consistently low debt levels relative to its assets and capital. The Debt-to-assets ratio has remained at 0.00% from 2020 to 2024, reflecting that the company has no debt in relation to its total assets. The Debt-to-capital and Debt-to-equity ratios also stand at 0.00% from 2021 to 2024, suggesting that the company is not reliant on debt to finance its operations and expansion.
Furthermore, the Financial leverage ratio shows a slight increase over the years, from 1.29 in 2021 to 1.58 in 2024. This indicates that the company has utilized some leverage to increase its return on equity, but the ratio remains at a moderate level, which implies a balanced capital structure without excessive reliance on debt.
Overall, Duolingo Inc's solvency ratios demonstrate a strong financial position with minimal debt burden, which may indicate effective management of resources and a lower risk of financial distress.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | — | — | -8.97 | 1.04 | -52.84 |
The interest coverage ratio measures a company's ability to meet its interest obligations from its operating income. Looking at the historical trend of Duolingo Inc's interest coverage ratio, it is evident that the company has faced fluctuations over the years.
As of December 31, 2020, the interest coverage ratio was significantly negative at -52.84, indicating a potential inability to cover interest expenses with operating income. This raises concerns about the company's financial health and its ability to manage debt.
By December 31, 2021, the interest coverage ratio improved to 1.04, which suggests that Duolingo Inc barely generated enough operating income to cover its interest expenses. While this indicates a slight improvement from the previous year, the ratio is still close to breakeven, highlighting ongoing financial challenges.
However, by December 31, 2022, the interest coverage ratio deteriorated to -8.97, signaling a regression in the company's ability to cover interest costs. This sharp decline further underscores the financial strain faced by Duolingo Inc.
Unfortunately, there is no data available for December 31, 2023 and December 31, 2024, which limits our ability to assess the company's recent interest coverage performance.
In conclusion, based on the data provided, Duolingo Inc has exhibited inconsistent and concerning interest coverage ratios over the years, indicating potential financial instability and a risk of default on interest payments. This highlights the importance of closely monitoring the company's financial performance and debt management strategies.