GE HealthCare Technologies Inc. (GEHC)

From the provided data, we can analyze the solvency ratios of GE HealthCare Technologies Inc. over a three-year period.

1. Debt-to-assets ratio: This ratio indicates the proportion of the company's assets financed by debt. A decreasing trend in the debt-to-assets ratio from 0.30 in 2022 to 0.23 in 2024 suggests that GE HealthCare Technologies Inc. has been reducing its reliance on debt to finance its assets, which is a positive sign for solvency.

2. Debt-to-capital ratio: The debt-to-capital ratio measures the percentage of a company's capital that is financed by debt. Although there was a slight increase in this ratio in 2023, it decreased to 0.47 in 2024. This indicates that a moderate portion of GE HealthCare Technologies Inc.'s capital structure is attributed to debt, which can enhance financial stability.

3. Debt-to-equity ratio: The debt-to-equity ratio compares a company's total debt to its total equity, reflecting the extent to which a company is leveraged. The ratio decreased from 1.18 in 2023 to 0.88 in 2024, indicating a lower reliance on debt compared to equity for funding operations, contributing to improved solvency.

4. Financial leverage ratio: This ratio evaluates the company's financial leverage by comparing total assets to equity. The declining trend from 4.55 in 2023 to 3.92 in 2024 suggests that GE HealthCare Technologies Inc. has been managing its leverage more efficiently, distributing risk more effectively between debt and equity.

In summary, the decreasing trend in the debt ratios over the three-year period indicates that GE HealthCare Technologies Inc. has been gradually improving its solvency position by reducing its reliance on debt and enhancing its balance sheet structure. These improvements imply a stronger financial position and better capacity to meet its financial obligations in the long term.

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Coverage ratios

Interest coverage is a key financial ratio that indicates a company's ability to meet its interest obligations on its outstanding debt. The interest coverage ratio is calculated by dividing a company's earnings before interest and taxes (EBIT) by its interest expenses.

For GE HealthCare Technologies Inc., the interest coverage ratio for December 31, 2022, stood at a healthy 46.70, indicating that the company's earnings before interest and taxes were sufficient to cover its interest expenses almost 47 times over. This high ratio suggests that the company has a strong ability to meet its interest payments.

However, there was a notable decline in the interest coverage ratio for December 31, 2023, which dropped to 3.95. This significant decrease could be a cause for concern as it indicates that the company's earnings may not be able to cover its interest expenses adequately, possibly signaling financial strain or a change in the company's profitability.

Fortunately, by December 31, 2024, the interest coverage ratio improved to 5.20, although it remained below the level seen in 2022. This increase shows some recovery in the company's ability to cover its interest costs, but it is still lower than the initial strong performance.

In conclusion, while GE HealthCare Technologies Inc. had a strong interest coverage ratio in 2022, the subsequent decline in 2023 raised concerns about its financial health. The partial recovery in 2024 is promising, but the company should monitor its interest coverage ratio closely to ensure it can meet its debt obligations comfortably in the future.