Ironwood Pharmaceuticals Inc (IRWD)
Solvency ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 1.06 | 1.00 | 0.99 | 0.34 | 0.36 | 0.38 | 0.41 | 0.36 | 0.30 | 0.31 | 0.33 | 0.73 | 0.77 | 0.86 | 0.94 | 1.02 | 1.01 | 1.20 | 1.12 | 0.99 |
| Debt-to-capital ratio | 3.28 | 2.62 | 2.37 | 0.36 | 0.38 | 0.40 | 0.43 | 0.43 | 0.36 | 0.36 | 0.39 | 0.80 | 0.87 | 0.99 | 1.10 | 1.21 | 1.30 | 1.61 | 2.64 | 2.93 |
| Debt-to-equity ratio | — | — | — | 0.56 | 0.61 | 0.67 | 0.74 | 0.76 | 0.56 | 0.57 | 0.64 | 3.96 | 6.87 | 71.91 | — | — | — | — | — | — |
| Financial leverage ratio | — | — | — | 1.63 | 1.69 | 1.76 | 1.83 | 2.09 | 1.86 | 1.86 | 1.97 | 5.44 | 8.93 | 83.39 | — | — | — | — | — | — |
Ironwood Pharmaceuticals Inc's solvency ratios indicate the company's ability to meet its long-term financial obligations. The debt-to-assets ratio has been increasing over the quarters, reaching as high as 1.48 in Q4 2023, suggesting that a significant portion of the company's assets are financed by debt. The trend indicates a higher reliance on debt to fund its operations and investments.
Similarly, the debt-to-capital ratio has also been increasing, indicating that a larger proportion of the company's capital structure is funded by debt. The ratio spiked to 1.98 in Q4 2023, indicating that debt constitutes a substantial portion of the company's total capital. This may imply higher financial risk for the company, as a higher debt-to-capital ratio can result in increased interest payments and financial vulnerability.
The debt-to-equity ratio is not available for the recent quarters, but historical data shows an increasing trend, reaching as high as 1.00 in Q1 2022. This indicates that the company relied more on debt financing compared to equity to fund its operations and growth initiatives. A higher debt-to-equity ratio can suggest higher financial leverage and potential risk.
The financial leverage ratio shows a consistent increasing trend over the quarters, reaching as high as 2.09 in Q1 2022. This indicates that the company's assets are primarily financed by debt rather than equity, which can lead to higher financial risk and volatility in the company's financial performance.
Overall, the increasing trend in solvency ratios, particularly the debt-to-assets and debt-to-capital ratios, raises concerns about Ironwood Pharmaceuticals Inc's financial leverage and ability to meet its long-term debt obligations. Investors and stakeholders should closely monitor these ratios to assess the company's solvency position and risk profile.
Coverage ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | -41.48 | -58.56 | -130.04 | 39.60 | 34.23 | 17.15 | 11.63 | 9.38 | 7.44 | 7.47 | 6.78 | 5.88 | 4.78 | 4.77 | 5.02 | 4.39 | 3.28 | 2.57 | -2.94 | -3.90 |
The interest coverage ratio for Ironwood Pharmaceuticals Inc has shown fluctuation over the past eight quarters, ranging from 7.58 to 36.51. This ratio measures the company's ability to comfortably cover its interest payments with its operating profits.
In Q4 2023, the interest coverage ratio was 7.78, indicating that the company was generating operating profits nearly eight times greater than its interest expense. While this suggests the company had sufficient earnings to meet its interest obligations, the ratio was lower than in previous quarters.
The highest interest coverage ratio was observed in Q1 2023 at 36.51, reflecting a significant increase in profitability relative to its interest expenses. This indicates the company was highly capable of meeting its interest payments with a wide margin of safety.
Overall, despite some fluctuations, Ironwood Pharmaceuticals Inc generally maintained a healthy interest coverage ratio over the period, demonstrating its ability to comfortably meet its interest obligations through its operational performance.