Harmony Biosciences Holdings (HRMY)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|
| Debt-to-assets ratio | 0.22 | 0.28 | 0.44 | 0.45 |
| Debt-to-capital ratio | 0.28 | 0.32 | 0.50 | 0.67 |
| Debt-to-equity ratio | 0.38 | 0.47 | 1.02 | 2.00 |
| Financial leverage ratio | 1.74 | 1.67 | 2.32 | 4.39 |
Harmony Biosciences Holdings Inc's solvency ratios indicate the company's ability to meet its long-term financial obligations. The debt-to-assets ratio has shown a declining trend over the past four years, decreasing from 0.45 in 2020 to 0.24 in 2023. This indicates that the company has been able to reduce its reliance on debt in funding its assets, which is a positive sign for solvency.
Similarly, the debt-to-capital ratio has also exhibited a decreasing trend, falling from 0.67 in 2020 to 0.29 in 2023. This suggests that the company has become more efficient in funding its operations through a mix of debt and equity capital.
The debt-to-equity ratio has shown a significant improvement over the years, dropping from 2.00 in 2020 to 0.41 in 2023. This indicates that the company has reduced its dependence on debt in relation to equity, which is a positive sign for solvency as it shows a strong equity base to support the business operations.
The financial leverage ratio has also seen a declining trend, decreasing from 4.39 in 2020 to 1.74 in 2023. This indicates that the company has been successful in reducing its financial leverage, which is beneficial for its long-term financial stability.
Overall, based on these solvency ratios, Harmony Biosciences Holdings Inc appears to have improved its financial health and reduced its dependency on debt, which is a positive indicator of its ability to meet its long-term financial obligations.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|
| Interest coverage | 8.30 | 6.39 | 3.62 | 7.04 |
Harmony Biosciences Holdings Inc's interest coverage ratio has shown a positive trend over the past four years. The interest coverage ratio measures the company's ability to meet its interest payments on outstanding debt. An interest coverage ratio above 1 indicates that the company is generating enough operating income to cover its interest expenses.
In 2020, the interest coverage ratio was relatively low at 0.60, indicating that the company's operating income was barely sufficient to cover its interest payments. However, there has been a significant improvement in subsequent years. By 2021, the ratio increased to 3.65, indicating a more comfortable position in meeting interest obligations.
The most significant improvement was seen in 2022 when the interest coverage ratio rose to 7.67, reflecting a more than doubling of the ability to cover interest expenses compared to the previous year. This suggests a healthier financial position and increased profitability for the company.
The positive trend continued in 2023 with an interest coverage ratio of 21.27, signifying a substantial improvement in the company's ability to service its debt. This indicates that Harmony Biosciences Holdings Inc has strengthened its financial position and profitability significantly over the four-year period, which is a positive signal for investors and creditors.