Lear Corporation (LEA)

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 0.17 0.19 0.19 0.18 0.19 0.19 0.19 0.19 0.21 0.18 0.17 0.17 0.20 0.18 0.19 0.18 0.18 0.18 0.18 0.16
Debt-to-capital ratio 0.33 0.36 0.36 0.35 0.36 0.38 0.37 0.36 0.38 0.33 0.33 0.34 0.37 0.36 0.37 0.36 0.35 0.36 0.36 0.32
Debt-to-equity ratio 0.50 0.57 0.55 0.54 0.56 0.60 0.59 0.56 0.62 0.50 0.48 0.51 0.59 0.56 0.60 0.57 0.53 0.56 0.55 0.46
Financial leverage ratio 2.99 3.01 2.97 2.97 2.94 3.11 3.01 2.95 2.88 2.82 2.77 2.93 2.95 3.12 3.17 3.24 2.92 3.03 3.03 2.91

Lear Corp.'s solvency ratios provide insights into the company's ability to meet its long-term financial obligations. The debt-to-assets ratio has been relatively stable around 0.19 over the past eight quarters, indicating that approximately 19% of the company's assets are financed by debt. This suggests a conservative approach to leverage, with a significant portion of assets being funded by equity.

The debt-to-capital ratio also demonstrates a consistent trend, hovering around 0.36. This ratio signifies that debt represents 36% of the company's total capital structure, which includes both debt and equity. This shows that Lear Corp. relies moderately on debt to finance its operations.

The debt-to-equity ratio has shown some fluctuations but generally remains within a reasonable range, indicating that debt accounts for around 56-57% of the company's equity. This suggests a balanced mix of debt and equity financing in Lear Corp.'s capital structure.

The financial leverage ratio, which measures the company's total assets relative to equity, has also been relatively stable around 3.0. This indicates that Lear Corp. uses its equity to support a significant portion of its assets, with a leverage factor of 3.0 implying that the company has $3 of assets for every $1 of equity.

Overall, Lear Corp. maintains a healthy balance between debt and equity in its capital structure, with a conservative approach to leverage. These solvency ratios reflect a stable financial position and suggest that the company is managing its long-term financial obligations 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 8.45 8.44 8.05 6.93 5.68 4.39 3.02 4.38 6.57 9.31 11.38 5.23 3.53 2.08 2.42 8.65 10.78 12.78 13.85 16.45

Interest coverage is a financial ratio that measures a company's ability to pay interest on its outstanding debt obligations. The table provided shows the interest coverage ratios for Lear Corp. over the past eight quarters.

The interest coverage ratio for Lear Corp. has been consistently above 1, indicating that the company is generating sufficient operating income to cover its interest expenses. A higher interest coverage ratio is generally considered favorable as it suggests a lower risk of default on debt obligations.

Looking at the trend over the past eight quarters, we can see that Lear Corp.'s interest coverage has been on an upward trajectory, starting at 5.48 in Q1 2022 and reaching 9.72 in Q4 2023. This improvement indicates that the company's operating income has been increasing relative to its interest expenses, strengthening its financial position.

Overall, Lear Corp.'s interest coverage ratios demonstrate a healthy financial performance, with a consistent upward trend signaling an improving ability to meet its interest payment obligations. This suggests that the company is effectively managing its debt and generating sufficient earnings to cover its financial obligations.