Incyte Corporation (INCY)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| 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 | 1.58 | 1.31 | 1.34 | 1.31 | 1.36 |
Incyte Corporation's solvency ratios indicate a strong financial position with minimal reliance on debt to finance its operations. The debt-to-assets ratio, which measures the proportion of the company's assets financed by debt, remains consistently at zero from 2020 to 2024. This suggests that Incyte Corporation primarily funds its operations through equity and retained earnings rather than borrowing.
Similarly, the debt-to-capital ratio, which assesses the extent of capital contributed by debt, also stands at zero across the five-year period, indicating a low level of financial leverage. The consistent zero value of the debt-to-equity ratio further supports the company's healthy financial structure, indicating that shareholders' equity predominantly funds its assets.
The financial leverage ratio, which provides an overall measure of the company's financial risk, reflects a stable trend ranging from 1.31 to 1.58 over the five-year period. This suggests that while there has been a slight increase in leverage in 2024 compared to previous years, the company's debt levels remain relatively low in relation to its equity base.
In conclusion, Incyte Corporation's solvency ratios demonstrate a prudent and conservative approach to managing its financial obligations, with a strong emphasis on equity funding and minimal reliance on debt financing.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 26.91 | 328.01 | 199.47 | 299.97 | -105.82 |
Interest coverage is a financial ratio that measures a company's ability to meet its interest obligations on its debt. A higher interest coverage ratio indicates a stronger ability to cover interest expenses.
Analyzing Incyte Corporation's interest coverage based on the provided data:
- As of December 31, 2020, the interest coverage ratio was -105.82, which indicates that the company's operating income was insufficient to cover its interest expenses. This may raise concerns about the company's financial health and its ability to repay debt.
- In the following years, there was a significant improvement in the interest coverage ratio. By December 31, 2021, the ratio had increased to 299.97, showing a substantial improvement and a strong ability to cover interest payments.
- The trend continued to improve in subsequent years, with the interest coverage ratios for December 31, 2022, and 2023, standing at 199.47 and 328.01 respectively, indicating a healthy financial position.
- However, by December 31, 2024, the interest coverage ratio decreased to 26.91, which might suggest a potential decrease in the company's ability to cover interest expenses. It is essential for Incyte Corporation to monitor this trend closely to ensure it maintains a comfortable level of interest coverage.
Overall, Incyte Corporation's interest coverage ratio has shown fluctuations over the years, with significant improvements in some years but a potential cause for concern in others. It is crucial for the company to maintain a stable and healthy interest coverage ratio to ensure its financial sustainability.