Laboratory Corporation of America Holdings (LH)

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	0.29	0.29	0.18	0.18	0.24	0.26	0.28	0.25	0.25	0.27	0.26	0.26	0.27	0.26	0.27	0.24	0.27	0.29	0.30	0.33
Debt-to-capital ratio	0.40	0.40	0.28	0.28	0.34	0.36	0.36	0.37	0.33	0.35	0.34	0.33	0.35	0.34	0.34	0.33	0.36	0.40	0.42	0.45
Debt-to-equity ratio	0.66	0.66	0.38	0.38	0.51	0.56	0.57	0.58	0.50	0.53	0.52	0.50	0.53	0.51	0.53	0.49	0.57	0.66	0.74	0.82
Financial leverage ratio	2.28	2.28	2.09	2.08	2.12	2.14	2.02	2.30	2.00	1.96	1.96	1.93	1.98	1.97	1.98	2.02	2.13	2.27	2.43	2.46

Laboratory Corporation of America Holdings' solvency ratios reflect the company's ability to meet its long-term financial obligations.

1. Debt-to-assets ratio: This ratio indicates the proportion of the company's assets financed by debt. Laboratory Corporation of America Holdings has shown a decreasing trend in this ratio over the years, from 0.33 in March 2020 to 0.18 in March 2024. This implies that the company is relying less on debt to finance its assets.

2. Debt-to-capital ratio: This ratio measures the proportion of capital provided by debt in the company's capital structure. Laboratory Corporation of America Holdings has exhibited fluctuations in this ratio, with a general downward trend. From 0.45 in March 2020, the ratio decreased to 0.28 in June 2024, indicating a reduction in reliance on debt financing.

3. Debt-to-equity ratio: This ratio evaluates the proportion of equity and debt used to finance the company's assets. Laboratory Corporation of America Holdings has shown a decreasing trend in this ratio from 0.82 in March 2020 to 0.38 in June 2024. This signifies a decreasing reliance on debt compared to equity in the company's capital structure.

4. Financial leverage ratio: This ratio measures the extent to which the company is using debt to finance its operations. Laboratory Corporation of America Holdings has experienced fluctuations in this ratio, with a peak of 2.46 in March 2020 and a decline to 2.09 in June 2024. The decreasing trend in this ratio indicates a reduction in financial risk associated with debt.

Overall, the solvency ratios of Laboratory Corporation of America Holdings demonstrate an improving financial position with decreasing reliance on debt and a more balanced capital structure over the analyzed period.

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	5.60	4.24	4.39	4.20	4.04	5.35	6.22	7.55	9.86	13.46	15.98	14.33	15.73	17.94	18.04	18.46	11.70	6.68	1.30	1.18

Laboratory Corporation of America Holdings' interest coverage has shown fluctuations over the period. The interest coverage ratio, which measures the company's ability to pay interest expenses on its outstanding debt, has generally improved from the beginning of the observed period.

In March 2020 and June 2020, the interest coverage ratio was low at 1.18 and 1.30, respectively, indicating a limited ability to cover interest payments with operating income. However, there was a significant improvement in the following quarters, with the ratio increasing to 6.68 by September 2020 and further to 11.70 by December 2020.

The interest coverage ratio continued to show strong performance into the first half of 2021, reaching levels above 15. However, in the latter part of 2021 and going into 2022, the ratio began to decline, albeit remaining above 10. The trend continued with a further decrease in subsequent periods, dropping to 4.24 by September 2024.

Overall, while Laboratory Corporation of America Holdings' interest coverage ratio has demonstrated variability over the period, it generally indicates an improvement in the company's ability to cover interest expenses with operating income, although there was a notable decline in the latter years of the period. Investors and stakeholders should monitor this trend to assess the company's financial health and ability to meet its debt obligations.