Lear Corporation (LEA)
Solvency ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 1.75 | 3.11 | 3.06 | 3.04 | 2.99 | 3.01 | 2.97 | 2.86 | 2.85 | 3.11 | 3.01 | 2.84 | 2.78 | 2.82 | 2.77 | 2.93 | 2.86 | 3.02 | 3.17 | 3.24 |
Based on the provided data for Lear Corporation, it is evident that the solvency ratios are consistently showing a healthy financial position.
1. Debt-to-assets ratio: Lear Corporation has maintained a debt-to-assets ratio of 0.00 throughout the reported periods. This indicates that the company's total debt is relatively low in comparison to its total assets, which is a positive indicator of financial strength.
2. Debt-to-capital ratio: Similar to the debt-to-assets ratio, the debt-to-capital ratio for Lear Corporation remains constant at 0.00 across all the periods. This reiterates the company's ability to finance its operations primarily through capital rather than debt.
3. Debt-to-equity ratio: The debt-to-equity ratio, showing a consistent value of 0.00, also reflects Lear Corporation's conservative use of debt in its capital structure. A lower debt-to-equity ratio signifies lower financial risk and higher solvency.
4. Financial leverage ratio: The financial leverage ratio, which measures the proportion of debt in a company's capital structure, has fluctuated over the periods but generally remained within a moderate range. The ratio peaked at around 3.24 in March 31, 2020, and has since trended downwards, reaching 1.75 by December 31, 2024. This declining trend indicates that Lear Corporation has been reducing its reliance on debt to finance its operations over time.
In conclusion, based on the solvency ratios analyzed, Lear Corporation appears to have a strong financial position with low debt levels, conservative debt usage, and a decreasing reliance on debt financing. This suggests a stable and sustainable financial standing for the company.
Coverage ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 8.61 | 8.90 | 8.95 | 7.05 | 6.90 | 6.94 | 6.65 | 7.46 | 6.17 | 5.01 | 3.64 | 5.04 | 7.36 | 9.97 | 11.98 | 5.82 | 4.01 | 2.57 | 2.93 | 9.12 |
The interest coverage ratio of Lear Corporation has shown fluctuations over the analyzed periods. The ratio was relatively high at 9.12 as of March 31, 2020, indicating the company had more than enough operating income to cover its interest expenses. However, in the subsequent quarters, the interest coverage ratio declined significantly to 2.93 as of June 30, 2020, and further to 2.57 as of September 30, 2020, signaling a potential strain on the company's ability to cover its interest obligations.
Subsequently, there was a gradual improvement in the interest coverage ratio, reaching 11.98 as of June 30, 2021, indicating that Lear Corporation's ability to cover interest payments had strengthened substantially. This improvement was sustained through the following quarters, with the ratio ranging between 5.04 to 8.95. The ratio peaked at 11.98, suggesting a strong ability to service interest expenses relative to operating earnings.
Overall, Lear Corporation's interest coverage ratio has displayed variability but generally improved in recent periods, indicating better financial health and a stronger capacity to meet interest obligations with operating income. An interest coverage ratio above 1 indicates that the company is generating more than enough earnings to cover its interest expenses, providing a buffer against financial risks related to debt servicing.