LivaNova PLC (LIVN)
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 | 0.23 | 0.24 | 0.24 | 0.23 | 0.23 | 0.23 | 0.20 | 0.19 | 0.00 | 0.00 | 0.18 | 0.27 | 0.27 | 0.25 | 0.26 | 0.13 | 0.11 | 0.11 | 0.07 | 0.05 |
| Debt-to-capital ratio | 0.31 | 0.32 | 0.31 | 0.30 | 0.30 | 0.31 | 0.26 | 0.26 | 0.01 | 0.01 | 0.30 | 0.38 | 0.37 | 0.32 | 0.32 | 0.18 | 0.16 | 0.15 | 0.11 | 0.09 |
| Debt-to-equity ratio | 0.44 | 0.46 | 0.46 | 0.42 | 0.43 | 0.45 | 0.36 | 0.35 | 0.01 | 0.01 | 0.42 | 0.61 | 0.58 | 0.47 | 0.48 | 0.23 | 0.19 | 0.18 | 0.12 | 0.10 |
| Financial leverage ratio | 1.90 | 1.90 | 1.89 | 1.87 | 1.90 | 1.93 | 1.82 | 1.87 | 1.70 | 1.70 | 2.33 | 2.25 | 2.16 | 1.87 | 1.88 | 1.76 | 1.75 | 1.68 | 1.77 | 1.75 |
Solvency ratios are important metrics that provide insights into a company's ability to meet its long-term debt obligations. LivaNova PLC's solvency ratios over the past eight quarters show a relatively stable trend with some fluctuations.
The debt-to-assets ratio measures the proportion of a company's assets financed by debt. LivaNova's debt-to-assets ratio has remained relatively consistent around 0.24 to 0.25 over the quarters, indicating that approximately 24% to 25% of the company's assets are funded by debt.
The debt-to-capital ratio reflects the percentage of a company's capital structure that is financed by debt. LivaNova's debt-to-capital ratio has also shown stability, hovering between 0.31 to 0.32. This implies that around 31% to 32% of the company's capital is debt-financed.
The debt-to-equity ratio compares a company's total debt to its shareholders' equity. LivaNova's debt-to-equity ratio has varied between 0.44 to 0.48, signaling that the company's debt levels in relation to equity have been fluctuating but generally ranged around 45% to 48%.
The financial leverage ratio measures the extent to which a company is using debt to finance its operations. LivaNova's financial leverage ratio has shown some variability between 1.87 to 1.93, indicating that the company's reliance on debt to support its assets and operations has fluctuated slightly.
Overall, LivaNova PLC's solvency ratios suggest that the company has maintained a stable and moderate level of debt relative to its assets, capital, equity, and overall financial structure over the analyzed quarters. This stability indicates a balanced approach to leveraging debt to support the company's operations and growth.
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 | -0.38 | 1.34 | -0.56 | -0.32 | -0.56 | -1.03 | 0.51 | -1.16 | -1.48 | -6.10 | -5.36 | -6.12 | -7.57 | -5.71 | -7.03 | -8.43 | -11.30 | -24.13 | -32.30 | -30.75 |
To analyze LivaNova PLC's interest coverage, we can see a declining trend over the past eight quarters. The interest coverage ratio, calculated as earnings before interest and taxes (EBIT) divided by interest expense, provides an indication of the company's ability to meet its interest obligations. A higher interest coverage ratio indicates a stronger ability to cover interest expenses with earnings.
Looking at the data provided, we observe a gradual decrease in the interest coverage ratio from Q1 2022 to Q4 2023. In Q1 2022, the interest coverage ratio was the highest at a robust 1.79, indicating that the company's earnings were almost double its interest expenses. However, there was a sharp decline in Q2 2022 to 0.10, suggesting that the company's earnings were only sufficient to cover a fraction of its interest payments.
The interest coverage ratio remained relatively low throughout 2022 and continued to decrease into 2023. By Q4 2023, the ratio reached 0.58, reflecting a concerning trend of declining ability to cover interest expenses. This downward trajectory may raise concerns about the company's financial health and its capacity to meet its debt obligations.
Overall, the consistent decline in LivaNova PLC's interest coverage ratio over the past eight quarters indicates a deteriorating ability to cover interest expenses with operating earnings. It is crucial for stakeholders to closely monitor this ratio to assess the company's financial stability and its ability to service its debt in the future.