Masimo Corporation (MASI)

Masimo Corporation's solvency ratios have shown varying trends over the years. The Debt-to-assets ratio has increased from 0.00 in 2020 and 2021 to 0.28 in 2024, indicating a slight increase in the proportion of assets financed by debt.

Similarly, the Debt-to-capital ratio has increased from 0.00 in 2020 and 2021 to 0.41 in both 2022 and 2024, suggesting a higher reliance on debt to fund the company's operations relative to its capital structure.

The Debt-to-equity ratio has also risen from 0.00 in 2020 and 2021 to 0.69 in 2024, indicating a greater proportion of debt used to finance the company's operations compared to shareholder equity.

Lastly, the Financial leverage ratio has shown a significant increase from 1.22 in 2020 and 2021 to 2.50 in 2024, reflecting a higher level of financial leverage and indicating that the company is using more debt to support its assets and operations.

Overall, Masimo Corporation's solvency ratios suggest an increasing reliance on debt financing, which may indicate a higher level of financial risk and a potential need for caution in managing debt levels going forward.

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Coverage ratios

Interest coverage ratio is a financial metric used to evaluate a company's ability to cover its interest expenses with its operating income. A higher ratio indicates a healthier financial position with more earnings available to cover interest obligations.

Based on the data provided for Masimo Corporation:
- As of December 31, 2020, the interest coverage ratio was exceptionally high at 880.01, indicating that the company's operating income was significantly more than enough to cover its interest expenses.
- By December 31, 2021, the interest coverage ratio improved even further to 915.80, which suggests the company's ability to service its debt obligations continued to strengthen.
- However, the ratio dropped significantly to 8.17 by December 31, 2022, which may raise concerns about the company's ability to cover its interest expenses with its operating income.
- The trend continued to worsen as of December 31, 2023, with the interest coverage ratio falling to 2.75, indicating a significant decrease in the company's ability to meet its interest obligations.
- The situation deteriorated drastically by December 31, 2024, with the interest coverage ratio plunging to -140.37. A negative interest coverage ratio suggests that the company's operating income was insufficient to cover its interest expenses, which could signal financial distress.

Overall, the trend in Masimo Corporation's interest coverage ratio shows a significant decline over the years, raising concerns about the company's ability to meet its interest obligations from its operating income. It is crucial for the company to closely monitor and address this trend to ensure its financial health and stability in the long run.