Inspire Medical Systems Inc (INSP)
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 | 0.05 | 0.09 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.06 | 0.10 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.07 | 0.11 |
| Financial leverage ratio | 1.17 | 1.18 | 1.14 | 1.29 | 1.22 |
Inspire Medical Systems Inc has demonstrated a strong solvency position over the past five years, as indicated by its decreasing trend in key solvency ratios.
The Debt-to-assets ratio has decreased from 0.09 in 2020 to 0.00 in 2022, 2023, and 2024, signaling that the company's level of debt in relation to its total assets has significantly improved. This indicates a lower financial risk as a smaller portion of the company's assets is financed by debt.
Similarly, the Debt-to-capital ratio has also decreased from 0.10 in 2020 to 0.00 in 2022, 2023, and 2024, suggesting that the company has become less reliant on debt to finance its operations and investments.
Furthermore, the Debt-to-equity ratio has followed a similar trend, declining from 0.11 in 2020 to 0.00 in 2022, 2023, and 2024, reflecting a lower level of financial leverage and reduced dependence on debt financing.
The Financial leverage ratio, which measures the company's overall debt level compared to its equity, has also decreased over the years, indicating a healthier capital structure and improved financial stability. Inspire Medical Systems Inc's ability to reduce its debt levels and maintain low solvency ratios reflects a prudent approach to managing its financial obligations and mitigating risk.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 1,640.14 | — | -25.40 | -18.72 | -25.97 |
Inspire Medical Systems Inc's interest coverage has shown significant fluctuations over the years, ranging from negative figures to an exceptionally high value in 2024. From 2020 to 2023, the company's interest coverage ratios were negative, indicating that the company did not have sufficient earnings to cover its interest expenses during these years. It is concerning when a company's interest coverage ratio is negative, as it implies that the company may have difficulty meeting its debt obligations.
However, in 2024, the interest coverage ratio surged to an unusually high value of 1,640.14. Such a high interest coverage ratio suggests that the company's earnings have substantially improved and that it now has a significant buffer to cover its interest expenses many times over. This drastic improvement in the interest coverage ratio from negative to a very high positive value in just one year is a positive sign for the company's financial health.
Overall, while the company faced challenges in meeting its interest obligations in the past, the substantial improvement in 2024 indicates a positive turnaround in the company's ability to cover its interest expenses and suggests a more stable financial position going forward.