Henry Schein Inc (HSIC)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 2.89 | 2.50 | 2.48 | 2.32 | 2.39 |
The solvency ratios of Henry Schein Inc, as depicted by the data provided, show that the company has consistently maintained a low level of debt in relation to its assets, capital, and equity over the past five years, with all ratios consistently at 0.00. This indicates that the company relies more on equity financing rather than debt to fund its operations and growth.
However, the financial leverage ratio has shown some fluctuation over the same period, starting at 2.39 in 2019 and peaking at 2.89 in 2023. This ratio measures the extent to which a company uses debt to finance its operations against equity. A higher financial leverage ratio signifies a higher level of debt relative to equity, indicating potential higher financial risk.
In summary, while Henry Schein Inc has effectively managed its debt levels with minimal reliance on debt financing, the increasing trend in the financial leverage ratio suggests a gradual shift towards a more leveraged financial structure, which could potentially increase the company's financial risk in the future.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 7.16 | 21.49 | 30.61 | 13.17 | 17.82 |
Interest coverage is a financial ratio that indicates a company's ability to meet its interest obligations on outstanding debt. It is calculated by dividing earnings before interest and taxes (EBIT) by the company's interest expense. A higher interest coverage ratio generally signifies a stronger ability to cover interest payments.
Based on the data provided for Henry Schein Inc, the interest coverage ratio has shown fluctuations over the past five years. In 2023, the interest coverage ratio was 7.16, which indicates a slight decline compared to the previous year. However, the company's interest coverage ratio remains at a level that suggests the company is capable of meeting its interest obligations.
The significant increase in the interest coverage ratio from 2020 to 2021, and then a subsequent decline in 2023, could be attributed to changes in the company's earnings and interest expense during those periods. While a higher interest coverage ratio is generally preferred by investors and creditors as it indicates a lower risk of default on interest payments, a sustained level above 1 is considered acceptable.
Overall, based on the trend observed in Henry Schein Inc's interest coverage ratios over the past five years, the company has shown the ability to comfortably meet its interest obligations, although fluctuations in the ratio warrant monitoring to ensure continued financial health and stability.