LivaNova PLC (LIVN)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.22 | 0.23 | 0.23 | 0.00 | 0.27 |
| Debt-to-capital ratio | 0.29 | 0.31 | 0.30 | 0.01 | 0.37 |
| Debt-to-equity ratio | 0.42 | 0.44 | 0.43 | 0.01 | 0.58 |
| Financial leverage ratio | 1.90 | 1.90 | 1.90 | 1.70 | 2.16 |
LivaNova PLC's solvency ratios indicate the company's ability to meet its long-term financial obligations. The Debt-to-assets ratio decreased from 0.27 in 2020 to 0.00 in 2021, suggesting a significant reduction in the proportion of debt relative to total assets. It slightly increased to 0.23 in 2022, 2023, and 2024, indicating a relatively stable debt level compared to total assets over these years.
The Debt-to-capital ratio also demonstrates a decreasing trend from 0.37 in 2020 to 0.01 in 2021, which implies a significant decrease in the company's reliance on debt financing relative to its total capital structure. The ratio slightly increased in the following years, reaching 0.30 in 2022, 0.31 in 2023, and 0.29 in 2024, indicating a slightly higher but still relatively low level of debt relative to the total capital.
Furthermore, the Debt-to-equity ratio declined significantly from 0.58 in 2020 to 0.01 in 2021, indicating a substantial decrease in the company's debt compared to equity. The ratio remained relatively stable at around 0.43 to 0.42 in 2022, 2023, and 2024, signaling a conservative capital structure with a moderate level of debt relative to shareholder equity.
Lastly, the Financial leverage ratio decreased from 2.16 in 2020 to 1.70 in 2021, suggesting a lower reliance on debt to support the company's assets. The ratio remained stable at 1.90 in 2022, 2023, and 2024, indicating consistent financial leverage over these years.
Overall, LivaNova PLC's solvency ratios reflect a prudent approach to managing debt and maintaining a healthy financial position, with a gradual reduction in debt levels and a stable capital structure over the years.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 5.97 | -0.38 | -0.56 | -1.48 | -7.57 |
LivaNova PLC's interest coverage ratio, a measure of its ability to meet interest obligations, has shown a concerning downward trend over the past few years. In 2020, the ratio was -7.57, indicating that the company's operating income was insufficient to cover its interest expenses. This situation worsened in 2021 with a ratio of -1.48 and further declined to -0.56 in 2022 and -0.38 in 2023, suggesting a persistent struggle to generate enough earnings to service its interest payments.
However, there seems to be some improvement in the company's interest coverage ratio in 2024, with a positive ratio of 5.97. This positive change indicates that LivaNova PLC's operating income was more than sufficient to cover its interest expenses that year. It is essential for the company to continue this positive trend to ensure its long-term financial stability and decrease its risk of defaulting on interest payments.