Ichor Holdings Ltd (ICHR)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.26 | 0.27 | 0.28 | 0.25 | 0.30 |
| Debt-to-capital ratio | 0.30 | 0.33 | 0.36 | 0.32 | 0.43 |
| Debt-to-equity ratio | 0.43 | 0.50 | 0.57 | 0.47 | 0.76 |
| Financial leverage ratio | 1.66 | 1.84 | 2.04 | 1.88 | 2.56 |
The solvency ratios of Ichor Holdings Ltd indicate the company's ability to meet its long-term financial obligations and provide insights into its overall financial health.
1. Debt-to-assets ratio: This ratio demonstrates the proportion of the company's assets that are financed by debt. A decreasing trend in this ratio from 0.30 in 2019 to 0.26 in 2023 suggests that Ichor Holdings has been effectively managing its debt levels relative to its assets over the years.
2. Debt-to-capital ratio: The debt-to-capital ratio measures the amount of a company's capital that is funded by debt. Ichor Holdings' ratio has decreased from 0.43 in 2019 to 0.30 in 2023, indicating a reduction in reliance on debt to finance its operations.
3. Debt-to-equity ratio: This ratio compares a company's total debt to its shareholder equity, reflecting the degree of leverage in its capital structure. Ichor Holdings' decreasing trend from 0.76 in 2019 to 0.43 in 2023 portrays a decreasing reliance on debt and improved equity position over the years.
4. Financial leverage ratio: The financial leverage ratio indicates the company's reliance on debt to finance its assets. Ichor Holdings' ratio has decreased from 2.56 in 2019 to 1.66 in 2023, signifying a reduction in financial leverage and a more conservative approach to debt utilization.
Overall, the declining trends in these solvency ratios demonstrate Ichor Holdings Ltd's efforts to improve its financial stability and reduce its dependence on debt financing. This could enhance the company's ability to withstand economic downturns and meet its long-term obligations effectively.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | -0.60 | 7.81 | 12.43 | 4.70 | 1.40 |
The interest coverage ratio of Ichor Holdings Ltd has fluctuated over the past five years. In 2023, the interest coverage ratio was negative, indicating that the company's earnings were insufficient to cover its interest expenses. This could be a cause for concern as it suggests potential financial distress.
In 2022 and 2021, the interest coverage ratio was relatively high at 7.81 and 12.43 respectively, indicating that the company was comfortably able to cover its interest expenses with its earnings. This suggests a strong financial position during those years.
In 2020 and 2019, the interest coverage ratio decreased to 4.70 and 1.40 respectively, indicating that the company's ability to cover its interest expenses with its earnings decreased during those years. This may be a signal of potential financial difficulties or increased financial risk.
Overall, the trend in Ichor Holdings Ltd's interest coverage ratio shows variability and indicates the importance of monitoring the company's financial performance closely to assess its ability to meet its debt obligations.