HealthEquity Inc (HQY)

Based on the solvency ratios of HealthEquity Inc over the past five years, the company has exhibited a consistent improvement in its solvency position.

The debt-to-assets ratio has decreased from 0.46 in 2020 to 0.28 in 2024, indicating that the company has reduced its reliance on debt to finance its assets. This trend suggests a strengthening financial position and lower financial risk.

Similarly, the debt-to-capital ratio has shown a declining trend from 0.53 in 2020 to 0.30 in 2024. This indicates that the proportion of debt in the company's capital structure has been decreasing, which is typically viewed favorably by investors and creditors.

The debt-to-equity ratio has also displayed a notable improvement, decreasing from 1.15 in 2020 to 0.43 in 2024. This decline suggests that HealthEquity Inc has reduced its debt levels in relation to its equity, improving its financial stability and reducing financial leverage.

The financial leverage ratio has also shown a significant reduction from 2.49 in 2020 to 1.55 in 2024. A decreasing trend in this ratio indicates that the company is relying less on debt financing and has enhanced its ability to meet its financial obligations.

Overall, the solvency ratios of HealthEquity Inc demonstrate a positive trajectory over the past five years, reflecting a stronger financial position, reduced reliance on debt, and improved ability to weather financial challenges.

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Coverage ratios

HealthEquity Inc's interest coverage ratio has been fluctuating over the past five years. In Jan 31, 2024, the interest coverage ratio improved significantly to 2.35, indicating the company's ability to meet its interest obligations with operating income. This is a positive sign compared to the previous year, where the ratio was only 0.21, suggesting a low ability to cover interest expenses.

The Jan 31, 2022, interest coverage ratio was negative at -0.82, which implies that the company's operating income was insufficient to cover its interest expenses, raising concerns about its financial health. However, there was a slight improvement in Jan 31, 2021, with a ratio of 1.12, indicating a marginal ability to cover interest payments.

The highest interest coverage ratio in the past five years was in Jan 31, 2020, at 2.74, indicating a strong ability to cover interest expenses with operating income. Overall, HealthEquity Inc's interest coverage has been volatile, with fluctuations impacting its ability to meet interest obligations. It is important for the company to maintain a sustainable level of interest coverage to ensure financial stability in the long run.