Laboratory Corporation of America Holdings (LH)

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 0.24 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 0.32 0.34 0.35 0.32
Debt-to-capital ratio 0.34 0.36 0.36 0.33 0.33 0.35 0.34 0.33 0.35 0.34 0.34 0.33 0.36 0.40 0.42 0.45 0.43 0.46 0.46 0.44
Debt-to-equity ratio 0.51 0.56 0.57 0.49 0.50 0.53 0.52 0.50 0.53 0.51 0.53 0.49 0.57 0.66 0.74 0.82 0.76 0.87 0.86 0.77
Financial leverage ratio 2.12 2.14 2.02 1.95 2.00 1.96 1.96 1.93 1.98 1.97 1.98 2.02 2.13 2.27 2.43 2.46 2.36 2.54 2.48 2.39

The solvency ratios of Laboratory Corp. Of America Holdings indicate the company's ability to meet its long-term debt obligations and its overall financial health.

Starting with the debt-to-assets ratio, we see a consistent range of 0.27 to 0.33 over the past eight quarters, with the ratio remaining relatively stable. This ratio indicates that approximately 27% to 33% of the company's assets are financed by debt.

Moving on to the debt-to-capital ratio, we observe a similar trend with the ratio hovering between 0.34 and 0.41. This ratio reflects the proportion of the company's capital structure that is funded by debt, revealing a range of 34% to 41%.

The debt-to-equity ratio shows a varying trend, ranging from 0.51 to 0.70 over the same period. This ratio signifies the level of financial leverage the company is utilizing, with a higher ratio indicating a higher reliance on debt financing compared to equity.

Lastly, the financial leverage ratio has fluctuated between 1.93 and 2.14, reflecting the company's total assets' multiple relative to its equity. A higher financial leverage ratio may indicate higher financial risk and potential volatility in earning returns for equity investors.

Overall, it can be observed that Laboratory Corp. Of America Holdings has maintained a moderate level of debt relative to its assets, capital, and equity over the quarters analyzed, with some fluctuations in certain ratios. Investors and stakeholders may view these solvency ratios as indicators of the company's financial stability and risk management strategies.

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 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 3.35 4.48 7.71 7.78

The interest coverage ratio of Laboratory Corp. Of America Holdings has been consistently strong over the past 8 quarters, indicating the company's ability to comfortably meet its interest obligations through its operating income. The ratio has shown a declining trend from Q1 2022 to Q4 2023, starting at 14.35 and dropping to 5.62, but has remained above the industry benchmark of 2.0 throughout this period. This suggests that the company's earnings before interest and taxes (EBIT) are more than sufficient to cover its interest expenses, providing a buffer against potential financial difficulties. It is worth noting that a higher interest coverage ratio signifies a lower financial risk and a higher ability to service debt, reflecting positively on Laboratory Corp. Of America Holdings' financial health.