eBay Inc (EBAY)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.32 | 0.37 | 0.29 | 0.40 | 0.37 |
| Debt-to-capital ratio | 0.52 | 0.60 | 0.44 | 0.68 | 0.70 |
| Debt-to-equity ratio | 1.09 | 1.50 | 0.79 | 2.17 | 2.35 |
| Financial leverage ratio | 3.38 | 4.05 | 2.72 | 5.42 | 6.33 |
Solvency ratios provide insights into a company's ability to meet its long-term financial obligations. Analyzing EBay Inc.'s solvency ratios over the past five years reveals a mixed trend.
The debt-to-assets ratio, which measures the proportion of total assets financed by debt, has shown some fluctuation. EBay's debt-to-assets ratio decreased from 0.43 in 2019 to 0.34 in 2021 before slightly increasing to 0.36 in 2023. This suggests that EBay has managed to reduce its reliance on debt to finance its assets over the years.
The debt-to-capital ratio, which indicates the percentage of capitalization that comes from debt, displays a similar trend. EBay's debt-to-capital ratio decreased from 0.73 in 2019 to 0.48 in 2021 before rising to 0.55 in 2023. This indicates that EBay has been reducing its dependence on debt for capitalizing its operations.
The debt-to-equity ratio, which shows the degree of financial leverage in the company's capital structure, has shown significant variability. EBay's debt-to-equity ratio decreased from 2.70 in 2019 to 0.93 in 2021 before increasing to 1.21 in 2023. This suggests that EBay has been working towards a more balanced and less leveraged capital structure.
The financial leverage ratio, which reflects the extent to which a company uses debt to finance its operations, has also shown fluctuations. EBay's financial leverage ratio decreased from 6.33 in 2019 to 2.72 in 2021 before increasing to 3.38 in 2023. This indicates that EBay has been managing its debt levels more effectively in recent years.
In conclusion, EBay Inc.'s solvency ratios demonstrate a trend towards a more conservative debt management approach over the past five years. The company has shown improvements in reducing its reliance on debt and managing its financial leverage, which could enhance its long-term financial stability.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 15.06 | -5.79 | 52.13 | 22.46 | 7.45 |
EBay Inc.'s interest coverage ratio has displayed significant fluctuations over the past five years. In 2023, the interest coverage ratio improved substantially to 32.90, indicating the company's strong ability to meet its interest obligations from its operating income. This represents a positive trend compared to the prior year.
However, in 2022, the interest coverage ratio was negative at -8.86, suggesting that the company's operating income was insufficient to cover its interest expenses during that period. This could be a concern for investors and creditors as it indicates financial distress.
In 2021, the interest coverage ratio was 2.23, showing a slight improvement from the previous year but still indicating a relatively tight capacity to cover interest payments.
In 2020 and 2019, the interest coverage ratios were 13.98 and 12.57, respectively, reflecting healthy coverage levels and a stable ability to meet interest obligations during those years.
Overall, EBay Inc.'s interest coverage has experienced fluctuations, with the company showing variability in its ability to cover interest expenses with operating income. Investors and creditors should closely monitor this ratio to assess the company's financial health and ability to service its debt obligations.