Masimo Corporation (MASI)

The solvency ratios of Masimo Corporation provide insights into the company's financial health and its ability to meet its long-term obligations.

The Debt-to-assets ratio has remained relatively stable at around 0.29 in 2023 and 2022, indicating that Masimo Corporation finances approximately 29% of its assets through debt. This ratio suggests that the company has a conservative approach to financing its operations with debt.

Similarly, the Debt-to-capital ratio has also been consistent at around 0.39 in 2023 and 0.41 in 2022. This ratio shows that debt accounts for about 39% of Masimo Corporation's total capital, which includes debt and equity. The stability of this ratio suggests that the company has maintained a balanced capital structure over the past few years.

The Debt-to-equity ratio has shown a slight improvement from 0.70 in 2022 to 0.64 in 2023. This ratio indicates that Masimo Corporation relies more on equity financing compared to debt, with debt representing around 64% of the company's equity. A decreasing trend in this ratio reflects a lower reliance on debt financing, which can be considered a positive sign for creditors and investors.

The Financial leverage ratio has also decreased from 2.40 in 2022 to 2.23 in 2023. This ratio measures the extent to which Masimo Corporation uses debt to finance its assets. A lower financial leverage ratio signifies lower financial risk and indicates that the company has a stronger equity position relative to debt.

Overall, the solvency ratios of Masimo Corporation demonstrate a prudent approach to managing its long-term financial obligations, with a balanced mix of debt and equity financing. The stable or improving trends in these ratios suggest that the company is effectively managing its financial leverage and maintaining a healthy capital structure.

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Coverage ratios

Masimo Corporation's interest coverage ratio has shown fluctuating trends over the past five years. The interest coverage ratio, which measures the company's ability to meet its interest obligations from its operating income, decreased significantly from 915.80 in 2021 to 2.75 in 2023. This suggests a notable decline in the company's ability to cover its interest expenses with its operating income. However, it is important to note that the interest coverage ratio was relatively stable and high in the years 2020 and 2019, indicating a strong ability to pay interest expenses during those periods. Overall, the recent decrease in the interest coverage ratio raises concerns about Masimo Corporation's ability to service its debt obligations from its operating income.