Masimo Corporation (MASI)
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 | 0.28 | 0.24 | 0.26 | 0.28 | 0.29 | 0.30 | 0.30 | 0.29 | 0.29 | 0.31 | 0.31 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.41 | 0.33 | 0.35 | 0.38 | 0.39 | 0.42 | 0.40 | 0.40 | 0.41 | 0.43 | 0.43 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.69 | 0.50 | 0.55 | 0.62 | 0.64 | 0.71 | 0.68 | 0.67 | 0.70 | 0.76 | 0.77 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 2.50 | 2.11 | 2.11 | 2.17 | 2.23 | 2.35 | 2.30 | 2.34 | 2.40 | 2.44 | 2.46 | 1.21 | 1.22 | 1.20 | 1.21 | 1.20 | 1.22 | 1.21 | 1.22 | 1.18 |
Based on the provided data, Masimo Corporation's solvency ratios show a stable financial position with a low level of debt relative to its assets, capital, and equity over the past few years.
The Debt-to-assets ratio has gradually increased from 0% in March 2020 to around 0.30% in June 2023 before slightly dropping to 0.29% by December 2024, indicating that Masimo relies very little on debt to finance its assets.
The Debt-to-capital ratio has shown a similar trend, starting from 0% in March 2020 and peaking at 0.43 in June 2022 before decreasing slightly to 0.41 by December 2024. This ratio highlights the proportion of debt in the company's capital structure, which remains relatively low.
The Debt-to-equity ratio has followed a similar pattern, starting at 0% in March 2020 and reaching its highest point of 0.77 in June 2022 before decreasing to 0.69 by December 2024. This ratio demonstrates Masimo's reliance on equity financing rather than debt financing.
The Financial leverage ratio has fluctuated over the years, starting at 1.18 in March 2020 and peaking at 2.50 by December 2024. This ratio indicates the extent to which Masimo is using debt to support its operations and investment activities, with the increasing trend suggesting higher financial risk associated with debt.
Overall, Masimo's solvency ratios reflect a conservative approach to capital structure management, with a gradual increase in leverage in recent years but still maintaining a relatively low level of debt compared to its assets, capital, and equity.
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 | -138.84 | 8.70 | 4.69 | 2.72 | 2.75 | 3.65 | 4.68 | 5.45 | 8.77 | 15.89 | 49.94 | 896.55 | 967.49 | 1,130.88 | 811.93 | 852.38 | 877.09 | 778.99 | 763.59 | 746.05 |
The interest coverage ratio measures a company's ability to pay its interest expenses on outstanding debt. A higher interest coverage ratio indicates a higher ability to meet interest obligations.
For Masimo Corporation, the interest coverage ratio has shown substantial fluctuations over the past few years. From March 31, 2020, to September 30, 2021, the company maintained exceptionally high interest coverage ratios above 700, indicating a strong ability to cover interest expenses. However, from June 30, 2022, there was a significant decline in the interest coverage ratio to below 50, which continued to decrease rapidly in the subsequent quarters.
The sudden drop in the interest coverage ratio from June 30, 2022, to December 31, 2024, and the negative ratio recorded in December 31, 2024, is a concerning trend. A declining interest coverage ratio suggests that Masimo Corporation may be facing challenges in meeting its interest payments with its operating income.
It is crucial for Masimo Corporation to closely monitor its interest coverage ratio and take corrective actions to improve it to avoid potential financial distress. This may involve optimizing its capital structure, improving operational efficiency, or exploring alternative financing options to enhance cash flow and maintain financial stability.