IPG Photonics Corporation (IPGP)
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 | 0.01 | 0.01 | 0.01 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.01 | 0.01 | 0.02 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.01 | 0.01 | 0.02 |
| Financial leverage ratio | 1.12 | 1.15 | 1.15 | 1.13 | 1.14 |
Based on the solvency ratios of IPG Photonics Corp over the past five years, we can observe the following trends:
1. Debt-to-assets ratio: This ratio indicates the proportion of the company's assets financed by debt. IPG Photonics Corp has maintained a consistently low debt-to-assets ratio, with it decreasing from 0.02 in 2019 to 0.00 in 2023. This suggests that the company has a strong ability to finance its assets with equity rather than debt, indicating a low level of financial risk.
2. Debt-to-capital ratio: Similar to the debt-to-assets ratio, the debt-to-capital ratio reflects the percentage of the company's capital structure that is attributed to debt. IPG Photonics Corp has also shown a decreasing trend in this ratio over the past five years, with it decreasing from 0.02 in 2019 to 0.00 in 2023, indicating a conservative approach to debt financing.
3. Debt-to-equity ratio: The debt-to-equity ratio provides insight into the extent to which a company is leveraging its equity through debt. IPG Photonics Corp has consistently maintained a low debt-to-equity ratio, with it decreasing from 0.02 in 2019 to 0.00 in 2023. This indicates that the company relies more on equity financing than debt, resulting in a favorable solvency position.
4. Financial leverage ratio: The financial leverage ratio measures the extent to which a company is using debt to finance its assets. IPG Photonics Corp's financial leverage ratio has fluctuated slightly over the past five years, with a peak in 2022 at 1.15, but generally remaining close to 1.12. This suggests that the company has maintained a stable level of financial leverage, with a majority of its assets financed by equity.
In summary, IPG Photonics Corp's solvency ratios reflect a prudent and conservative approach to debt financing, with a decreasing trend in debt ratios over the years. The company's strong ability to finance its assets with equity and maintain a low level of debt indicates a healthy solvency position and a reduced risk of financial distress.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 5.56 | 13.43 | — | 3.34 | 16.42 |
The interest coverage ratio for IPG Photonics Corp was not reported for the fiscal years ending December 31, 2023, and December 31, 2020. However, in 2022, the company had an interest coverage ratio of 191.82, which indicates that IPG Photonics Corp generated profits that were 191.82 times larger than its interest payments for that year. This high coverage ratio reflects the company's strong ability to meet its interest obligations from operating profits. The absence of reported data for the other years limits the trend analysis of the company's ability to cover its interest expenses over time. Further information would be needed to conduct a more in-depth analysis of IPG Photonics Corp's interest coverage stability and performance.