Harmony Biosciences Holdings (HRMY)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.16 | 0.22 | 0.28 | 0.44 | 0.45 |
| Debt-to-capital ratio | 0.20 | 0.28 | 0.32 | 0.50 | 0.67 |
| Debt-to-equity ratio | 0.25 | 0.38 | 0.47 | 1.02 | 2.00 |
| Financial leverage ratio | 1.52 | 1.74 | 1.67 | 2.32 | 4.39 |
Harmony Biosciences Holdings has shown a consistent improvement in its solvency ratios over the years. The Debt-to-assets ratio has decreased from 0.45 in December 2020 to 0.16 in December 2024, indicating a lower reliance on debt to finance its assets. The Debt-to-capital ratio has also decreased significantly from 0.67 in December 2020 to 0.20 in December 2024, showing a reduced proportion of debt in the company's capital structure.
Moreover, the Debt-to-equity ratio has decreased from 2.00 in December 2020 to 0.25 in December 2024, reflecting a lower level of debt relative to equity in the company's financing. This suggests an improved financial health and lower financial risk for Harmony Biosciences Holdings. Additionally, the Financial leverage ratio has decreased steadily from 4.39 in December 2020 to 1.52 in December 2024, indicating a decreasing reliance on debt financing to generate returns for shareholders.
Overall, these trends in solvency ratios demonstrate that Harmony Biosciences Holdings has gradually strengthened its financial position, reducing its debt levels and improving its ability to cover its financial obligations with its available assets and capital.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 10.91 | 8.30 | 6.39 | 3.62 | 7.04 |
Interest coverage ratio measures a company's ability to pay its interest expenses on outstanding debt. Harmony Biosciences Holdings interest coverage has fluctuated over the past five years. In 2020, the interest coverage ratio was 7.04, indicating that the company generated enough earnings to cover its interest expenses over seven times. However, there was a decline in 2021 with the interest coverage ratio dropping to 3.62, suggesting a decrease in the company's ability to cover interest costs.
The trend improved in 2022 and 2023, with interest coverage ratios of 6.39 and 8.30 respectively, reflecting better financial health and increased earnings relative to interest expenses. The most recent data for 2024 shows a significant improvement with an interest coverage ratio of 10.91, indicating that Harmony Biosciences Holdings has a strong ability to cover its interest obligations from its operating income. Overall, the company's interest coverage ratio has shown volatility but has generally been trending positively, with the latest data suggesting a healthy financial position.