LivaNova PLC (LIVN)

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 0.22 0.24 0.25 0.25 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
Debt-to-capital ratio 0.29 0.32 0.33 0.33 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
Debt-to-equity ratio 0.42 0.46 0.49 0.50 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
Financial leverage ratio 1.90 1.93 1.97 2.01 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

The solvency ratios of LivaNova PLC indicate its ability to meet its long-term financial obligations. Here is a detailed analysis based on the provided data:

1. Debt-to-Assets Ratio:
The debt-to-assets ratio for LivaNova PLC has fluctuated over the period under consideration. It started at 0.13 as of March 31, 2020, increased to a peak of 0.27 by December 31, 2021, and subsequently decreased to 0.22 by December 31, 2024. This ratio indicates the proportion of the company's assets financed by debt. A lower ratio is generally favorable as it suggests lower financial risk.

2. Debt-to-Capital Ratio:
The debt-to-capital ratio measures the proportion of a company's capital that is debt. LivaNova PLC's ratio ranged from 0.01 to 0.38 during the period. It peaked at 0.38 as of March 31, 2021, and trended downwards to 0.29 by December 31, 2024. A decreasing trend in this ratio indicates a lower reliance on debt to fund operations.

3. Debt-to-Equity Ratio:
The debt-to-equity ratio for LivaNova PLC reflects the proportion of debt and equity in the company's capital structure. The ratio ranged from 0.01 to 0.61 during the period, with fluctuations over time. A lower ratio signifies a lower reliance on debt financing, which can be considered less risky for investors.

4. Financial Leverage Ratio:
The financial leverage ratio calculates the extent to which a company utilizes debt to finance its operations. LivaNova PLC's ratio fluctuated between 1.70 and 2.33 across the period. A higher ratio implies a higher level of financial leverage and, consequently, higher financial risk due to increased interest obligations.

Overall, the analysis of LivaNova PLC's solvency ratios suggests that the company has managed its debt levels and solvency position relatively well over the period. However, it is essential for stakeholders to monitor these ratios regularly to assess the company's long-term financial health and risk profile.

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 4.37 -0.68 -1.08 -1.04 -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

The interest coverage ratio for LivaNova PLC has been predominantly negative from March 31, 2020, to September 30, 2023, indicating that the company's operating income was insufficient to cover its interest expenses during these periods. This signifies potential financial distress and an elevated risk of default on debt obligations.

However, starting from June 30, 2024, the interest coverage ratio turned positive and improved further until December 31, 2024. A positive interest coverage ratio signifies that the company's operating income is now more than sufficient to cover its interest obligations, indicating a more favorable financial position in terms of debt repayment capacity.

Overall, the trend suggests that LivaNova PLC faced challenges in meeting its interest obligations in the past but has shown signs of improvement in recent periods, indicating a positive development in its ability to manage its debt burden.