Ironwood Pharmaceuticals Inc (IRWD)

The solvency ratios of Ironwood Pharmaceuticals Inc show fluctuating trends over the past five years.

The Debt-to-assets ratio has increased from 0.40 in 2021 to 1.48 in 2023, indicating that the company's debt level relative to its total assets has significantly risen. This may suggest potential financial risk as a higher debt-to-assets ratio implies a greater reliance on debt financing.

Similarly, the Debt-to-capital ratio has also shown an increase over the years, reaching 1.98 in 2023 from 0.43 in 2021. This ratio reflects the proportion of a company's capital that is financed through debt, and the rising trend suggests an increasing dependence on debt to fund its operations or investments.

In contrast, the Debt-to-equity ratio has been volatile, with a substantial spike to 6.87 in 2020 before dropping to 0.61 in 2022. The absence of a value for this ratio in some years may indicate a lack of shareholder equity or a negative net worth, which could be a red flag for investors and lenders.

Lastly, the Financial leverage ratio, which provides an indication of the company's financial risk, has also displayed significant fluctuations, peaking at 8.93 in 2020 and decreasing to 1.69 in 2022. A high financial leverage ratio suggests a high level of debt relative to equity, indicating potential financial vulnerability.

Overall, the solvency ratios of Ironwood Pharmaceuticals Inc indicate varying levels of debt and capital structure over the years, highlighting the importance of closely monitoring the company's financial leverage and debt management strategies to ensure long-term financial stability.

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Coverage ratios

Ironwood Pharmaceuticals Inc's interest coverage has shown fluctuations over the past five years. The interest coverage ratio indicates the company's ability to meet its interest obligations through its operating income. A higher interest coverage ratio is generally favorable as it suggests a stronger ability to cover interest expenses.

In 2023, Ironwood Pharmaceuticals Inc's interest coverage ratio was 7.78, which indicates the company generated operating income 7.78 times higher than its interest expenses. This represents a decrease from the exceptionally high ratio of 32.95 in 2022, when the company demonstrated a very strong ability to cover interest costs. In 2021, the interest coverage ratio was 7.45, showing a similar level of coverage as in 2023. Comparatively, in 2020 and 2019, the ratios were 5.37 and 3.20, respectively, indicating a lower ability to cover interest expenses in those years.

Overall, the trend in Ironwood Pharmaceuticals Inc's interest coverage shows variability, with periods of strong coverage followed by decreases. It is important for investors and creditors to monitor this ratio closely to assess the company's ability to manage its interest obligations effectively.