Innoviva Inc (INVA)

Innoviva Inc's solvency ratios indicate a very strong financial position with negligible levels of debt relative to its assets, capital, and equity across the years 2020 to 2024. The Debt-to-assets ratio, Debt-to-capital ratio, and Debt-to-equity ratio all stood at 0.00, suggesting that the company has no significant debt obligations in relation to its total assets, capital structure, or shareholders' equity.

Furthermore, the Financial leverage ratio, which measures the extent to which a company is utilizing debt to finance its operations, showed a relatively stable trend over the period, ranging from 1.84 to 2.23. Although this ratio slightly fluctuated, it generally remained below 2.5, indicating that Innoviva Inc relied more on equity financing rather than debt to support its business activities.

Overall, based on these solvency ratios, Innoviva Inc appears to have a robust financial health with a conservative approach towards debt management, which bodes well for its long-term stability and ability to withstand financial challenges.

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Coverage ratios

Based on the provided data, Innoviva Inc's interest coverage ratio has shown fluctuations over the years. The interest coverage ratio is a measure of a company's ability to meet its interest obligations on outstanding debt. A higher ratio indicates that the company is more capable of covering its interest expenses.

In December 2020, Innoviva Inc had an interest coverage ratio of 16.54, indicating that the company generated 16.54 times the earnings needed to cover its interest expenses for that period. This suggests a comfortable financial position at that time.

The ratio improved in December 2021 to 22.35, showing a stronger ability to cover interest expenses. This increase may be attributed to higher earnings or lower interest expenses during that period.

In December 2022, the interest coverage ratio slightly decreased to 19.17. Although it was lower than the previous year, the ratio still indicates that the company had sufficient earnings to cover its interest obligations.

However, the interest coverage ratio declined significantly to 11.13 in December 2023, which may raise concerns about the company's ability to meet its interest payments comfortably. A lower ratio could indicate increased financial risk or a decrease in earnings relative to interest expenses.

By December 2024, the interest coverage ratio dropped sharply to 2.68, signaling a potential financial strain on Innoviva Inc's ability to cover its interest costs. A ratio below 1 would mean the company is not generating enough earnings to cover its interest expenses.

In conclusion, Innoviva Inc's interest coverage ratio has shown fluctuations over the years, indicating varying levels of financial strength and ability to meet interest obligations. It is essential for the company to closely monitor this ratio to ensure financial stability and manage any risks associated with interest payments.