Laboratory Corporation of America Holdings (LH)

The solvency ratios of Laboratory Corp. Of America Holdings indicate the company's ability to meet its financial obligations and manage its debt levels over the years.

The debt-to-assets ratio has shown a slight increase from 0.27 in 2022 to 0.31 in 2023, indicating that a higher proportion of the company's assets are financed by debt. However, the ratio remains relatively stable over the past five years.

The debt-to-capital ratio has followed a similar trend, increasing slightly from 0.35 in 2022 to 0.39 in 2023. This ratio measures the proportion of a company's capital that is financed by debt, and the increase suggests a slightly higher reliance on debt financing.

The debt-to-equity ratio has also shown a gradual increase over the years, reaching 0.65 in 2023. This ratio indicates the extent to which the company is leveraged by debt relative to its equity, and the rising trend may suggest a higher level of financial risk.

The financial leverage ratio, which measures the company's total assets in relation to its equity, has fluctuated but remains relatively stable around the 2.00 to 2.38 range over the past five years. This indicates that the company has been maintaining a consistent level of leverage in its capital structure.

Overall, while the company's solvency ratios show some fluctuations, indicating changes in its debt levels and capital structure, Laboratory Corp. Of America Holdings appears to have maintained moderate solvency and financial stability over the years.

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Coverage ratios

The interest coverage ratio for Laboratory Corp. Of America Holdings has shown fluctuating trends over the past five years. In 2023, the interest coverage ratio decreased to 5.62 from 11.84 in 2022, indicating a decline in the company's ability to cover its interest expenses with its operating income. Despite the decrease, the ratio remains above 1, suggesting that the company still generates enough operating income to cover its interest obligations.

Compared to 2021 and 2020, where the interest coverage ratios were 15.70 and 14.23 respectively, the recent decline in 2023 may raise some concerns about the company's ability to handle its interest payments. However, the ratio in 2023 is still higher than that in 2019, which was 5.79, indicating a significant improvement over the past five years.

Overall, while the recent decrease in the interest coverage ratio for Laboratory Corp. Of America Holdings is a point of attention, the company has historically maintained adequate coverage of its interest expenses with its operating income. Monitoring this ratio and the company's financial performance will be crucial to ensure it can meet its debt obligations in the future.