Jazz Pharmaceuticals PLC (JAZZ)

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	0.45	0.46	0.51	0.52	0.53	0.55	0.53	0.51	0.49	0.50	0.49	0.27	0.28	0.29	0.34	0.30	0.28	0.28	0.29	0.30
Debt-to-capital ratio	0.58	0.59	0.62	0.63	0.65	0.67	0.65	0.62	0.60	0.61	0.61	0.33	0.34	0.35	0.40	0.36	0.34	0.34	0.34	0.36
Debt-to-equity ratio	1.37	1.46	1.61	1.71	1.85	2.07	1.87	1.66	1.52	1.59	1.57	0.49	0.51	0.55	0.66	0.56	0.51	0.51	0.53	0.57
Financial leverage ratio	3.05	3.21	3.19	3.31	3.51	3.78	3.50	3.26	3.10	3.17	3.20	1.78	1.79	1.86	1.93	1.86	1.78	1.81	1.84	1.93

Analyzing Jazz Pharmaceuticals plc's solvency ratios, we observe a general trend of increasing leverage over the past eight quarters. The debt-to-assets ratio has been consistently around the 0.50 to 0.55 range, indicating that approximately 50-55% of the company's assets are financed through debt. This suggests a moderate level of leverage but relatively stable asset coverage by debt.

The debt-to-capital ratio has followed a similar upward trend, ranging from 0.60 to 0.65 over the same period. This ratio indicates that Jazz Pharmaceuticals finances around 60-65% of its capital structure through debt, implying a moderate to high level of debt in the company's overall financing mix.

Furthermore, the debt-to-equity ratio has shown a steady increase from 1.53 to 1.67, with some quarters even reaching 1.86 to 2.09. This trend signifies a higher reliance on debt financing compared to equity, with the company's debt levels exceeding its equity in the more recent periods.

Finally, the financial leverage ratio, which measures the proportion of a company's total assets that are financed by its creditors, has displayed a consistent upward trajectory from 3.05 to 3.26. This indicates that Jazz Pharmaceuticals has been increasingly reliant on debt to fund its operations and expansion, potentially leading to higher financial risk and obligations.

In conclusion, Jazz Pharmaceuticals plc's solvency ratios suggest a growing level of leverage and a greater proportion of debt in its capital structure over the past two years. It is essential for stakeholders to closely monitor these trends to assess the company's ability to meet its debt obligations and manage its financial risk effectively.

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	1.87	0.66	0.15	-0.09	-0.23	0.81	1.12	0.59	1.89	3.86	6.07	9.59	4.97	14.57	5.62	3.85	7.37	9.12	9.75	8.88

Interest coverage is a financial ratio that indicates a company's ability to meet its interest obligations on outstanding debt. Jazz Pharmaceuticals plc's interest coverage has shown a positive trend over the past eight quarters, increasing from a low of 0.27 in Q1 2022 to a high of 2.05 in Q4 2023. This improvement suggests that the company's operating profits are sufficiently high to cover its interest expenses.

A ratio of less than 1.0 indicates that a company is not generating enough operating income to meet its interest payments. Jazz Pharmaceuticals plc's interest coverage has consistently remained above 1.0 since Q2 2022, indicating that the company is in a relatively stable financial position with regards to covering its interest obligations.

The gradual increase in interest coverage over the quarters signifies improved profitability or better management of debt levels by Jazz Pharmaceuticals plc. The latest interest coverage ratio of 2.05 in Q4 2023 indicates that the company's operating income is more than twice its interest expenses, demonstrating a strong ability to service its debt.