ICU Medical Inc (ICUI)

Solvency ratios provide insight into a company's ability to meet its long-term financial obligations and remain financially stable. Here is a detailed analysis of ICU Medical, Inc.'s solvency ratios based on the provided data:

1. Debt-to-assets ratio:
- This ratio indicates the proportion of a company's assets financed by debt.
- ICU Medical, Inc. has maintained a consistent debt-to-assets ratio of 0.37 in both 2023 and 2022, suggesting that approximately 37% of the company's assets are financed by debt.

2. Debt-to-capital ratio:
- The debt-to-capital ratio measures the proportion of a company's capital that is financed by debt.
- ICU Medical, Inc. shows a slight decrease in this ratio from 0.44 in 2022 to 0.43 in 2023, indicating that 43% of the company's capital is derived from debt.

3. Debt-to-equity ratio:
- This ratio compares a company's total debt to its shareholders' equity, reflecting the level of financial leverage.
- ICU Medical, Inc. has a debt-to-equity ratio of 0.77 for 2023, down slightly from 0.79 in 2022. This implies that the company relies more on equity financing compared to debt financing.

4. Financial leverage ratio:
- The financial leverage ratio measures the extent to which a company uses debt to finance its operations.
- ICU Medical, Inc.'s financial leverage ratio has shown a declining trend from 2.16 in 2022 to 2.06 in 2023. This reduction indicates a decreased reliance on debt to support the company's operations.

Overall, ICU Medical, Inc. has maintained a relatively low level of debt in relation to its assets, capital, and equity over the years. The company's improving financial leverage ratio suggests a more conservative approach to debt financing, which may enhance its long-term solvency and financial health.

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Coverage ratios

The interest coverage ratio measures a company's ability to cover its interest expenses with its operating income. A higher interest coverage ratio indicates that the company is more capable of meeting its interest obligations. Conversely, a lower ratio suggests potential financial distress.

Looking at the trend for ICU Medical, Inc.'s interest coverage ratio over the past five years, it is evident that there has been significant fluctuation. In 2019, the ratio was strong at 266.43, indicating robust ability to cover interest expenses. However, in 2022, the ratio dipped to -0.05, signaling a concerning situation where the company's operating income was insufficient to cover its interest payments.

In 2023, the interest coverage ratio improved to 0.50, but it remains below 1.0, implying that ICU Medical, Inc. may still have difficulty meeting its interest obligations from its operating income alone. This suggests that the company's financial health in terms of its debt obligations may still be a concern and should be closely monitored.