HealthEquity Inc (HQY)

HealthEquity Inc's solvency ratios have shown a positive trend over the years, indicating a strong financial position and decreasing reliance on debt.

1. Debt-to-assets ratio has decreased from 0.34 in January 2021 to 0.31 in January 2025. This ratio demonstrates that 31% of the company's assets are funded by debt, showing a conservative approach to leverage.

2. Debt-to-capital ratio has also decreased from 0.40 in January 2021 to 0.33 in January 2025. This reflects that 33% of the company's capital is financed by debt, suggesting a healthy balance between debt and equity financing.

3. Debt-to-equity ratio has decreased from 0.67 in January 2021 to 0.50 in January 2025, indicating a declining reliance on debt for financing the company's operations.

4. Financial leverage ratio has decreased from 1.97 in January 2021 to 1.63 in January 2025. This ratio indicates that the company's assets are financed at a decreasing rate in relation to its equity.

Overall, the decreasing trend in these solvency ratios suggests that HealthEquity Inc has been managing its debt levels effectively and has gradually strengthened its financial position over the years.

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Coverage ratios

The interest coverage ratio for HealthEquity Inc has shown fluctuations over the past five years. In January 2021, the ratio was 1.12, indicating that the company's operating income was just sufficient to cover its interest expenses. However, in the following year, the ratio dropped to -0.82, signifying that the company's operating income was not enough to cover its interest expenses, raising concerns about its financial health.

By January 2023, the interest coverage ratio improved to 0.21, though still low, suggesting that the company was generating slightly more operating income to cover its interest costs. Subsequently, in January 2024 and 2025, the interest coverage ratios increased to 2.35 and 2.68, respectively, demonstrating that HealthEquity Inc's operating income now comfortably covers its interest expenses, indicating a stronger financial position.

Overall, while the company experienced challenges in the past with negative interest coverage, it has since made significant improvements and now seems to be in a healthier financial state with a more robust ability to meet its interest payment obligations.