Inspire Medical Systems Inc (INSP)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.05 | 0.09 | 0.14 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.06 | 0.10 | 0.15 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.07 | 0.11 | 0.18 |
| Financial leverage ratio | 1.18 | 1.14 | 1.29 | 1.22 | 1.30 |
Inspire Medical Systems Inc has showcased a consistently strong solvency position over the past five years, as indicated by its solvency ratios. The debt-to-assets ratio has consistently remained at zero for the last two years, signifying that the company has not utilized debt to finance its assets, indicating a lower financial risk for creditors. Similarly, the debt-to-capital and debt-to-equity ratios have also maintained a zero level for the same period, suggesting that the company has a healthy capital structure with minimal reliance on debt financing.
Moreover, the financial leverage ratio has shown a downward trend over the years, decreasing from 1.30 in 2019 to 1.18 in 2023. This trend indicates that the company has been reducing its reliance on debt to support its operations in favor of equity financing. A lower financial leverage ratio implies lower financial risk and a more stable capital structure.
Overall, based on the solvency ratios analyzed, Inspire Medical Systems Inc appears to have a strong financial position with a conservative approach to debt management. This stability in solvency ratios can be viewed positively by investors and creditors, showcasing the company's ability to meet its financial obligations effectively.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | — | -25.40 | -18.72 | -25.97 | -14.67 |
The interest coverage ratio measures a company's ability to cover its interest expenses with its operating income. A higher ratio indicates a stronger ability to meet interest obligations.
Looking at the data for Inspire Medical Systems Inc, the interest coverage ratio has been negative for the past five years, which is a concerning trend. A negative interest coverage ratio implies that the company's operating income was insufficient to cover its interest expenses, indicating financial distress.
The company experienced a significant decline in its interest coverage ratio from -14.67 in 2019 to -25.97 in 2020, indicating a worsening financial situation. Despite a slight improvement in 2021 and 2022, with ratios of -18.72 and -25.40, respectively, the company's financial position remains weak.
Overall, the negative interest coverage ratios suggest that Inspire Medical Systems Inc may have liquidity issues and struggles to meet its interest payments with its current level of operating income. Investors and creditors should closely monitor the company's financial performance and evaluate its ability to generate sufficient income to cover its interest expenses in the future.