Intel Corporation (INTC)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.25 | 0.21 | 0.20 | 0.22 | 0.19 |
| Debt-to-capital ratio | 0.31 | 0.27 | 0.26 | 0.29 | 0.25 |
| Debt-to-equity ratio | 0.44 | 0.37 | 0.35 | 0.42 | 0.33 |
| Financial leverage ratio | 1.81 | 1.80 | 1.77 | 1.89 | 1.76 |
The solvency ratios provide insights into Intel Corporation's ability to meet its long-term financial obligations and the extent of its leverage.
1. Debt-to-assets ratio: Intel's debt-to-assets ratio has been relatively stable over the past five years, ranging from 0.19 to 0.25. This ratio indicates that, on average, Intel uses approximately 20-25% of its assets to finance its operations with debt. A lower ratio is generally favorable as it suggests lower financial risk.
2. Debt-to-capital ratio: Intel's debt-to-capital ratio has also shown consistency, with values between 0.25 and 0.31. This ratio reflects the proportion of the company's capital that is financed through debt. A lower ratio suggests that Intel relies less on debt for funding its operations.
3. Debt-to-equity ratio: Intel's debt-to-equity ratio has fluctuated between 0.33 and 0.44 over the past five years. This ratio indicates the extent to which debt is used to finance the company's operations relative to shareholder equity. A higher ratio may indicate higher financial risk due to increased reliance on debt.
4. Financial leverage ratio: Intel's financial leverage ratio has shown slight variability but has generally been around 1.77 to 1.89. This ratio measures the proportion of the company's assets financed through debt relative to equity. A higher ratio implies higher financial leverage and potential for higher returns, but also greater risk.
Overall, Intel Corporation's solvency ratios suggest a moderate level of leverage and stable debt management over the past five years. The company has maintained a relatively balanced mix of debt and equity financing, with a slightly increasing trend in some ratios. Investors and stakeholders may find these ratios useful in assessing Intel's long-term financial health and risk profile.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 1.88 | 16.66 | 37.35 | 40.87 | 50.20 |
The interest coverage ratio measures a company's ability to cover its interest expenses with its operating income. A higher interest coverage ratio indicates that the company is more capable of meeting its interest obligations.
Looking at the trend for Intel Corporation's interest coverage ratio over the past five years, we observe a significant decline from 50.20 in 2019 to 1.88 in 2023. This decreasing trend suggests a weakening ability of Intel Corporation to cover its interest expenses with its operating income.
The sharp decrease in the interest coverage ratio from 2022 to 2023 is particularly concerning, as it dropped from 16.66 to 1.88. This may indicate increased financial risk for the company, as a ratio below 2 is generally considered weak and raises questions about the company's ability to comfortably meet its interest payments.
It would be advisable for stakeholders and investors of Intel Corporation to closely monitor this trend and assess the company's ability to generate sufficient operating income to cover its interest expenses in the future.