Etsy Inc (ETSY)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 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 | — | — | 6.10 | 3.24 | 3.79 |
Etsy Inc's solvency ratios provide insights into the company's ability to meet its long-term financial obligations.
1. Debt-to-assets ratio: The trend of Etsy's debt-to-assets ratio has been increasing over the past five years, indicating a higher reliance on debt to finance its assets. The ratio stood at 0.89 in 2023, reflecting that 89% of the company's assets are funded by debt.
2. Debt-to-capital ratio: This ratio shows the proportion of debt in the company's capital structure. Etsy's debt-to-capital ratio has also been on an upward trajectory, reaching 1.29 in 2023. This suggests that debt accounts for 129% of the company's total capital, including both debt and equity.
3. Debt-to-equity ratio: The debt-to-equity ratio measures the extent to which a company is financed by debt versus equity. Although data for 2021 and 2022 is missing, the ratios for 2020 and 2019 were 1.50 and 2.08 respectively, signifying that Etsy had higher levels of debt relative to equity in those years.
4. Financial leverage ratio: This ratio assesses the company's leverage position by comparing its total assets to equity. With a financial leverage ratio of 6.10 in 2021, Etsy had a significant amount of leverage that year, indicating that the company relied heavily on debt financing to fund its operations.
Overall, the increasing trend in these solvency ratios suggests that Etsy has been taking on more debt relative to its assets, capital, and equity over time. This could potentially increase financial risk and impact the company's ability to meet obligations in the long run. Investors and creditors may closely monitor these ratios to assess the company's solvency and financial health.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 21.85 | -45.72 | 48.71 | 9.70 | 4.32 |
Etsy Inc's interest coverage ratio has experienced fluctuations over the past five years. The company's interest coverage ratio was 24.78 in 2023, 27.28 in 2022, 47.12 in 2021, 10.09 in 2020, and 3.65 in 2019.
Overall, a higher interest coverage ratio indicates that the company is more capable of meeting its interest obligations from its operating income. The significant increase in the interest coverage ratio from 2019 to 2021 suggests an improvement in Etsy's ability to cover its interest payments. However, the decrease in the ratio in 2023 compared to the previous years may indicate a reduction in the company's ability to cover its interest expenses efficiently.
It is essential for investors and financial analysts to monitor Etsy Inc's interest coverage ratio closely to assess the company's financial health and ability to meet its debt obligations.