Harmonic Inc (HLIT)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.01 | 0.02 | 0.16 | 0.24 | 0.15 |
| Debt-to-capital ratio | 0.02 | 0.03 | 0.27 | 0.35 | 0.26 |
| Debt-to-equity ratio | 0.02 | 0.03 | 0.38 | 0.54 | 0.35 |
| Financial leverage ratio | 1.76 | 2.19 | 2.34 | 2.29 | 2.33 |
The solvency ratios of Harmonic, Inc. provide insights into the company's ability to meet its long-term financial obligations and the extent to which it relies on debt to finance its operations.
The debt-to-assets ratio has shown a decreasing trend from 0.26 in 2019 to 0.17 in 2023, indicating that the company has been successful in reducing its debt levels in relation to its total assets. This suggests a stronger financial position and lower risk of insolvency.
Similarly, the debt-to-capital ratio has also improved over the years, declining from 0.38 in 2019 to 0.23 in 2023. This signifies that Harmonic, Inc. has reduced its reliance on debt for funding its operations and has increased its reliance on equity and other sources of capital.
The debt-to-equity ratio has exhibited a downward trend, reflecting a decrease in the proportion of debt relative to equity in the company's capital structure. This can be seen as a positive development as it indicates a lower financial risk and a stronger financial base.
The financial leverage ratio, which measures the company's use of debt in relation to its equity, has shown fluctuations but has generally decreased over the years. A declining financial leverage ratio implies that the company is relying less on debt financing, which can enhance its financial stability and reduce the potential risks associated with high leverage.
Overall, analyzing these solvency ratios suggests that Harmonic, Inc. has been effectively managing its debt levels, improving its financial health, and reducing its risk exposure over the years.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 8.10 | 9.03 | 1.83 | -1.28 | 0.43 |
Interest coverage ratio indicates the company's ability to meet its interest obligations from its operating income. Harmonic, Inc.'s interest coverage has been fluctuating over the past five years. The ratio was at its highest in 2022 at 9.69, indicating the company's strong ability to cover its interest expenses with operating income. However, there was a significant decrease in 2023 to 8.52, although it still indicates a healthy ability to meet interest payments.
On the other hand, in 2021 and 2019, the interest coverage ratios were 1.78 and 1.39 respectively, reflecting a lower ability to cover interest expenses from operating income. Notably, in 2020, the ratio was negative, which implies that operating income was insufficient to cover interest expenses during that period, raising concerns about the company's financial health.
Overall, Harmonic, Inc. should aim to maintain a consistently high interest coverage ratio to demonstrate financial stability and minimize the risk of default on interest payments.