Medtronic PLC (MDT)
Solvency ratios
| Apr 26, 2024 | Apr 28, 2023 | Apr 29, 2022 | Apr 30, 2021 | Apr 24, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.24 | 0.25 | 0.31 | 0.24 |
| Debt-to-capital ratio | 0.00 | 0.30 | 0.30 | 0.36 | 0.30 |
| Debt-to-equity ratio | 0.00 | 0.42 | 0.44 | 0.56 | 0.44 |
| Financial leverage ratio | 1.79 | 1.77 | 1.73 | 1.81 | 1.79 |
The solvency ratios of Medtronic PLC provide insight into the company's ability to meet its long-term financial obligations.
1. Debt-to-assets ratio: This ratio indicates the proportion of Medtronic's assets financed by debt. The decreasing trend from 0.31 in 2021 to 0.00 in 2024 reflects a more conservative financing structure where the company relies less on debt to fund its assets.
2. Debt-to-capital ratio: This ratio measures the extent of Medtronic's capital structure supported by debt. Similar to the debt-to-assets ratio, the decreasing trend from 0.36 in 2021 to 0.00 in 2024 signifies a move towards a capital structure with lower reliance on debt financing.
3. Debt-to-equity ratio: The debt-to-equity ratio indicates the proportion of Medtronic's assets financed by equity compared to debt. The decreasing trend from 0.56 in 2021 to 0.00 in 2024 highlights the company's efforts to decrease its debt levels relative to equity, signaling a stronger solvency position.
4. Financial leverage ratio: This ratio gauges the extent to which Medtronic uses debt to support its assets. The stability around 1.79 to 1.81 from 2020 to 2024 indicates a consistent level of financial leverage, suggesting that the company maintains a balanced approach to debt utilization.
Overall, the declining trend in debt-related solvency ratios and stable financial leverage ratio point towards Medtronic's improving financial stability and reduced reliance on debt for its operations. This trend may enhance the company's ability to weather economic downturns and meet its long-term obligations effectively.
Coverage ratios
| Apr 26, 2024 | Apr 28, 2023 | Apr 29, 2022 | Apr 30, 2021 | Apr 24, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 7.69 | 9.39 | 10.94 | 5.18 | 4.70 |
Medtronic PLC's interest coverage ratio has shown some fluctuations over the past five years. The interest coverage ratio measures a company's ability to pay its interest expenses on outstanding debt.
In April 2024, Medtronic PLC's interest coverage ratio was 7.69, which indicates that the company earned 7.69 times the amount of interest expense it incurred during that period. This ratio decreased compared to the previous year, suggesting a slight decrease in the company's ability to cover its interest expenses.
In April 2023 and April 2022, the interest coverage ratios were higher at 9.39 and 10.94 respectively, reflecting a stronger ability to cover interest expenses during those years. This upward trend demonstrates an improvement in Medtronic PLC's financial position in terms of servicing its debt obligations.
However, the interest coverage ratio in April 2021 dropped to 5.18, indicating a temporary decrease in the company's ability to cover interest expenses compared to the previous year. This could signal increased financial risk or a higher dependence on debt financing during that period.
Similarly, in April 2020, the interest coverage ratio was 4.70, which was lower than the following years, suggesting a potential strain on the company's ability to meet its interest payment obligations, possibly due to external factors impacting its financial performance.
Overall, while Medtronic PLC has shown varying levels of interest coverage over the past five years, the company has generally maintained a satisfactory ability to cover its interest expenses, with some fluctuations that may warrant further analysis to understand the underlying factors affecting its financial health.