Illumina Inc (ILMN)
Solvency ratios
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 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 | 0.16 | 0.16 | 0.16 | 0.15 |
| Debt-to-capital ratio | 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 | 0.20 | 0.20 | 0.21 | 0.22 |
| Debt-to-equity ratio | 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 | 0.25 | 0.25 | 0.26 | 0.28 |
| Financial leverage ratio | 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 | 1.59 | 1.60 | 1.61 | 1.85 |
The solvency ratios provide insight into Illumina Inc's ability to meet its financial obligations and manage its debt levels.
1. Debt-to-assets ratio: This ratio indicates the proportion of Illumina's assets that are financed by debt. It has ranged between 0.11 to 0.22 over the past eight quarters, with a downward trend in the most recent quarters. A lower debt-to-assets ratio is generally considered favorable as it implies less reliance on debt to finance assets.
2. Debt-to-capital ratio: This ratio reflects the percentage of Illumina's capital structure that is funded by debt. It has fluctuated between 0.14 and 0.29, showing some variability in the company's debt utilization. A lower debt-to-capital ratio suggests a stronger financial position and less risk associated with debt obligations.
3. Debt-to-equity ratio: This ratio compares Illumina's total debt to its shareholder equity, representing the level of financial leverage. The ratio has varied between 0.16 and 0.41, with a decreasing trend in recent quarters. A lower debt-to-equity ratio indicates lower financial risk and better equity cushion to cover debt obligations.
4. Financial leverage ratio: This ratio measures Illumina's total assets relative to its equity, reflecting the level of leverage in the company's capital structure. It has ranged from 1.40 to 1.86, showing some fluctuations. A lower financial leverage ratio signifies less dependency on debt financing and a stronger equity base.
Overall, the analysis of these solvency ratios suggests that Illumina Inc has been effectively managing its debt levels and strengthening its financial position, as evidenced by the declining trend in debt ratios and leverage metrics over the past quarters. These improvements indicate a lower risk of financial distress and a healthier balance between debt and equity in the company's capital structure.
Coverage ratios
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | -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 | 22.73 | 18.75 | 17.25 | 16.54 |
Interest coverage is a financial ratio that indicates a company's ability to pay interest expenses on its outstanding debt. A higher interest coverage ratio implies that a company is more capable of servicing its debt. However, a negative interest coverage ratio suggests that the company is not generating enough operating income to cover its interest expenses.
In the case of Illumina Inc, the interest coverage ratio has been inconsistent over the past eight quarters. The ratio ranged from -15.00 to 23.60, indicating significant fluctuations in the company's ability to cover its interest expenses. Specifically, in Q4 2023 and Q3 2023, the company recorded negative interest coverage ratios of -11.68 and -15.00, respectively, which raises concerns about its ability to meet its interest obligations from its operating income.
On the other hand, Illumina Inc showed improved interest coverage in Q1 2023 with a ratio of 8.83, indicating that the company's operating income was sufficient to cover its interest expenses during that period. However, it is worth noting that in the previous quarters, the company struggled to cover its interest costs, as evident from negative ratios in Q2 and Q1 2022.
Overall, the fluctuating nature of Illumina Inc's interest coverage ratio suggests that the company's ability to meet its interest obligations varies significantly from quarter to quarter. Investors and analysts should closely monitor this ratio to assess the company's financial health and debt servicing capacity.