Enphase Energy Inc (ENPH)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.37 | 0.38 | 0.39 | 0.46 | 0.00 |
| Debt-to-capital ratio | 0.59 | 0.57 | 0.59 | 0.69 | 0.01 |
| Debt-to-equity ratio | 1.44 | 1.32 | 1.45 | 2.21 | 0.01 |
| Financial leverage ratio | 3.90 | 3.44 | 3.74 | 4.83 | 2.48 |
Enphase Energy Inc's solvency ratios indicate the company's ability to meet its long-term financial obligations.
1. Debt-to-assets ratio:
- Enphase Energy Inc's debt-to-assets ratio has shown an increasing trend from 0.00 in 2020 to 0.37 in 2024. This ratio measures the proportion of the company's assets financed by debt. The increase suggests that Enphase Energy Inc has been relying more on debt to finance its operations over the years.
2. Debt-to-capital ratio:
- Enphase Energy Inc's debt-to-capital ratio has fluctuated but generally remained at elevated levels, ranging from 0.59 to 0.69 during the period from 2021 to 2024. This ratio indicates the proportion of the company's capital that is financed by debt. The high ratios indicate a significant reliance on debt in the company's capital structure.
3. Debt-to-equity ratio:
- Enphase Energy Inc's debt-to-equity ratio, which reflects the amount of debt relative to shareholders' equity, decreased from 2.21 in 2021 to around 1.44 in 2024. While the ratio has declined, it still indicates that the company is using a substantial amount of debt to finance its operations, which may pose higher financial risk.
4. Financial leverage ratio:
- The financial leverage ratio for Enphase Energy Inc has fluctuated but generally remained around 3 to 4 during the period from 2021 to 2024. This ratio measures the company's ability to meet its financial obligations and indicates the level of debt used in its capital structure. A higher ratio suggests higher financial risk and dependency on debt financing.
In conclusion, Enphase Energy Inc's increasing debt ratios indicate a growing reliance on debt to finance its operations, which could potentially increase financial risk and impact the company's solvency in the long run. Investors and stakeholders should closely monitor these solvency ratios to assess the company's financial health and stability.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 8.68 | 59.05 | 48.90 | 3.68 | 6.69 |
The interest coverage ratio measures a company's ability to meet its interest obligations on outstanding debt. Looking at the data provided for Enphase Energy Inc's interest coverage ratio, we observe a fluctuation over the years:
- As of December 31, 2020, the interest coverage ratio was 6.69, indicating that the company generated enough operating income to cover its interest expenses approximately 6.69 times over.
- By December 31, 2021, the ratio decreased to 3.68, suggesting a decline in the company's ability to cover its interest payments from operating earnings.
- However, there was a significant improvement by December 31, 2022, with a notably high interest coverage ratio of 48.90, indicating a strong financial position and ability to meet interest obligations.
- This strong performance continued into December 31, 2023, with an even higher interest coverage ratio of 59.05, reflecting a robust ability to service its debt with operating income.
- By December 31, 2024, the interest coverage ratio decreased to 8.68, still indicating a healthy ability to cover interest costs, although lower than the peak in 2023.
Overall, Enphase Energy Inc's interest coverage ratio has shown variability but generally demonstrates the company's ability to meet its interest payments comfortably, with some fluctuations in performance over the years. It is essential for investors and creditors to monitor these ratios to assess the company's financial health and ability to manage its debt obligations effectively.