Illumina Inc (ILMN)
Solvency ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.24 | 0.33 | 0.25 | 0.15 | 0.15 | 0.15 | 0.13 | 0.00 | 0.12 | 0.00 | 0.00 | 0.00 | 0.11 | 0.00 | 0.00 | 0.00 | 0.09 | 0.09 | 0.09 | 0.09 |
| Debt-to-capital ratio | 0.39 | 0.48 | 0.51 | 0.21 | 0.21 | 0.20 | 0.19 | 0.00 | 0.18 | 0.00 | 0.00 | 0.00 | 0.14 | 0.00 | 0.00 | 0.00 | 0.13 | 0.12 | 0.13 | 0.12 |
| Debt-to-equity ratio | 0.63 | 0.94 | 1.04 | 0.26 | 0.26 | 0.25 | 0.23 | 0.00 | 0.23 | 0.00 | 0.00 | 0.00 | 0.16 | 0.00 | 0.00 | 0.00 | 0.14 | 0.14 | 0.14 | 0.14 |
| Financial leverage ratio | 2.66 | 2.83 | 4.23 | 1.75 | 1.76 | 1.72 | 1.80 | 1.76 | 1.86 | 1.67 | 1.48 | 1.40 | 1.42 | 1.42 | 1.67 | 1.78 | 1.62 | 1.58 | 1.59 | 1.57 |
The solvency ratios of Illumina Inc provide insights into the company's ability to meet its long-term financial obligations.
1. Debt-to-assets ratio:
- Illumina Inc maintained a consistent low debt-to-assets ratio of around 0.09 in 2020, but this ratio significantly increased to 0.33 by September 2024.
- The sudden increase in this ratio indicates a higher level of debt relative to the company's total assets in recent years, which could potentially raise concerns about the company's financial stability.
2. Debt-to-capital ratio:
- The debt-to-capital ratio remained relatively stable at around 0.12 to 0.14 in 2020, but showed a significant increase to 0.51 by June 2024.
- The rising trend in the debt-to-capital ratio suggests that Illumina Inc has been relying more on debt to finance its operations, which could result in higher financial risk and decreased financial flexibility.
3. Debt-to-equity ratio:
- Illumina Inc had a consistent debt-to-equity ratio of 0.14 in 2020, but this ratio soared to 1.04 by June 2024.
- The surge in the debt-to-equity ratio indicates a substantial increase in the company's debt relative to its equity, signaling a higher level of financial leverage and potential vulnerability to economic downturns.
4. Financial leverage ratio:
- The financial leverage ratio fluctuated over the years, with values ranging from 1.40 to 4.23.
- The sharp increase in the financial leverage ratio to 4.23 by June 2024 highlights the significant reliance on debt to fund the company's operations, which could lead to heightened financial risks and concerns about the company's solvency.
In conclusion, Illumina Inc's solvency ratios indicate a concerning trend of increasing debt levels and financial leverage, which may raise questions about the company's ability to meet its long-term financial obligations and sustain its operations in the long run. Investors and stakeholders should closely monitor these ratios to assess the company's financial health and risk profile.
Coverage ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | -45.11 | -31.56 | -48.00 | -14.50 | -13.68 | -15.67 | -73.20 | -110.10 | -159.63 | -130.68 | 1.26 | 18.43 | 15.24 | 17.85 | 15.35 | 15.88 | 18.49 | 19.80 | 21.05 | 23.21 |
Illumina Inc's interest coverage ratio measures its ability to meet interest payments on its outstanding debt. A higher interest coverage ratio indicates a stronger ability to cover interest expenses.
From March 31, 2020, to June 30, 2021, Illumina Inc's interest coverage ratio consistently decreased, showing a declining trend. This downward trend could raise concerns about the company's ability to comfortably meet its interest obligations from its operating income.
However, starting from September 30, 2021, the interest coverage ratio increased, showing some improvement in the company's ability to cover interest expenses. The ratio peaked at 18.43 on March 31, 2022, indicating a temporary improvement in Illumina Inc's financial health.
Subsequently, in the following quarters, the interest coverage ratio plummeted dramatically, turning negative from June 30, 2022, and remaining negative until December 31, 2024. Negative interest coverage ratios suggest that the company's operating income is insufficient to cover its interest payments, which raises significant concerns about Illumina Inc's financial stability and ability to service its debt.
The drastic decline in the interest coverage ratio indicates a deteriorating financial position for Illumina Inc, highlighting potential financial distress and the need for the company to reassess its debt levels and financial strategies to address this issue.