Alphabet Inc Class A (GOOGL)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.02 | 0.03 | 0.03 | 0.03 | 0.04 |
| Debt-to-capital ratio | 0.03 | 0.04 | 0.04 | 0.05 | 0.06 |
| Debt-to-equity ratio | 0.03 | 0.04 | 0.04 | 0.05 | 0.06 |
| Financial leverage ratio | 1.39 | 1.42 | 1.43 | 1.43 | 1.44 |
Alphabet Inc Class A shows consistently strong solvency ratios over the years. The Debt-to-assets ratio has decreased from 0.04 in December 31, 2020 to 0.02 in December 31, 2024, indicating that only a small portion of the company's assets are financed by debt. Similarly, the Debt-to-capital ratio has steadily declined from 0.06 in 2020 to 0.03 in 2024, demonstrating Alphabet's ability to rely less on debt in funding its capital structure.
Moreover, the Debt-to-equity ratio has followed a similar downward trend, falling from 0.06 in 2020 to 0.03 in 2024, showcasing a decreasing reliance on equity to finance the company's operations. The Financial leverage ratio has decreased from 1.44 in 2020 to 1.39 in 2024, indicating a decreasing dependency on debt to generate profits.
Overall, Alphabet Inc Class A's solvency ratios suggest a conservative capital structure and strong financial health, as the company effectively manages its debt levels and maintains a solid balance between debt and equity financing.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 579.33 | 279.30 | 200.80 | 263.24 | 357.16 |
Alphabet Inc Class A's interest coverage ratio has fluctuated over the last five years. The interest coverage ratio provides an indication of the company's ability to meet its interest obligations with its operating income.
As of December 31, 2020, Alphabet Inc Class A had an impressive interest coverage ratio of 357.16, indicating a very strong ability to cover its interest expenses with its operating income.
However, in the following years, the interest coverage ratio experienced some fluctuations. By December 31, 2021, the ratio had decreased to 263.24, indicating a slightly weaker ability to cover interest expenses compared to the previous year.
During the year ending December 31, 2022, Alphabet Inc Class A's interest coverage ratio further decreased to 200.80. This decline may suggest that the company's operating income was less sufficient to cover its interest expenses during this period.
By December 31, 2023, the interest coverage ratio improved to 279.30, showing a partial recovery from the decrease in the previous year.
Finally, as of December 31, 2024, Alphabet Inc Class A's interest coverage ratio significantly increased to 579.33, indicating a robust ability to cover its interest obligations with its operating income.
In conclusion, while Alphabet Inc Class A's interest coverage ratio exhibited fluctuations over the five-year period, the trend overall suggests that the company has generally maintained a strong ability to cover its interest expenses with its operating income, with some fluctuations in certain years.