FormFactor Inc (FORM)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.01 | 0.01 | 0.02 | 0.03 | 0.02 |
| Debt-to-capital ratio | 0.01 | 0.02 | 0.02 | 0.03 | 0.02 |
| Debt-to-equity ratio | 0.01 | 0.02 | 0.02 | 0.03 | 0.02 |
| Financial leverage ratio | 1.22 | 1.25 | 1.25 | 1.29 | 1.31 |
FormFactor Inc's solvency ratios indicate a consistently low level of debt relative to its assets, capital, and equity over the past five years. The debt-to-assets ratio has remained stable at around 0.01 to 0.03, suggesting that the company has maintained a conservative approach to financing its operations with debt.
Similarly, the debt-to-capital and debt-to-equity ratios have also shown a stable and low level of debt leverage over the years, ranging from 0.01 to 0.03. This implies that FormFactor Inc has been efficient in managing its debt levels in relation to its total capital and equity, maintaining a healthy balance between debt and equity financing.
The financial leverage ratio, which measures the extent of a company's financial leverage, has slightly decreased from 1.31 in 2019 to 1.22 in 2023. This indicates that the company has reduced its reliance on debt financing and has improved its financial stability and ability to meet its debt obligations.
Overall, based on the solvency ratios analyzed, FormFactor Inc appears to have a strong solvency position with low debt levels and a prudent approach to managing its financial leverage, which bodes well for its long-term financial health and stability.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 213.04 | 100.95 | 164.62 | 99.58 | 27.66 |
FormFactor Inc's interest coverage ratio has displayed a positive trend over the past five years, indicating the company's ability to comfortably meet its interest obligations using its earnings before interest and taxes (EBIT). The interest coverage ratio has substantially improved from 27.66 in 2019 to 213.04 in 2023, signaling a significant enhancement in the company's ability to cover its interest payments with its operating income.
This increasing trend suggests that FormFactor Inc has been generating a significantly higher level of operating income relative to its interest expenses, which is a positive indicator of the company's financial health and ability to service its debt obligations. The substantial improvement in the interest coverage ratio from 2019 to 2023 reflects the company's strengthening financial position and reduced financial risk related to its debt obligations. Overall, the consistent improvement in interest coverage ratio over the years signifies FormFactor Inc's enhanced financial stability and ability to manage its debt effectively.