Medtronic PLC (MDT)
Solvency ratios
| Apr 30, 2025 | Apr 30, 2024 | Apr 26, 2024 | Apr 30, 2023 | Apr 28, 2023 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.24 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.30 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.42 |
| Financial leverage ratio | 1.91 | 1.79 | 1.79 | 1.77 | 1.77 |
Based on the data provided, we can analyze the solvency ratios of Medtronic PLC:
1. Debt-to-assets ratio: This ratio indicates the proportion of a company's assets that are financed by debt. Medtronic's debt-to-assets ratio has been consistently low, with values of 0.24 in April 28, 2023, and 0.00 in subsequent years up to April 30, 2025. A decreasing trend in this ratio suggests that Medtronic has been reducing its reliance on debt to finance its assets, which is generally a positive sign for solvency.
2. Debt-to-capital ratio: The debt-to-capital ratio measures the percentage of a company's capital that is financed by debt. Similar to the debt-to-assets ratio, Medtronic's debt-to-capital ratio has shown a decreasing trend, declining from 0.30 on April 28, 2023, to 0.00 in the following years up to April 30, 2025. A declining debt-to-capital ratio reflects a lower financial risk associated with debt financing.
3. Debt-to-equity ratio: This ratio compares a company's total debt to its shareholders' equity, indicating the extent to which a company is leveraged through debt. Medtronic's debt-to-equity ratio was 0.42 on April 28, 2023, and subsequently decreased to 0.00 in the years up to April 30, 2025. The decreasing trend in this ratio implies that Medtronic has been reducing its reliance on debt in relation to equity, which improves the company's financial stability.
4. Financial leverage ratio: The financial leverage ratio shows the proportion of a company's assets that are financed by debt versus equity. Medtronic's financial leverage ratio has increased slightly over the years, from 1.77 on April 28, 2023, to 1.91 on April 30, 2025. While the increase suggests a higher level of financial leverage, the overall ratio remains at a moderate level, indicating a balanced mix of debt and equity in the company's capital structure.
In summary, Medtronic PLC has exhibited a strong solvency position with decreasing debt ratios and a moderate financial leverage ratio, indicating a prudent approach to debt financing and a solid financial foundation.
Coverage ratios
| Apr 30, 2025 | Apr 30, 2024 | Apr 26, 2024 | Apr 30, 2023 | Apr 28, 2023 | |
|---|---|---|---|---|---|
| Interest coverage | 0.00 | 7.73 | 7.69 | 9.08 | 9.39 |
Interest coverage is a key financial ratio that indicates a company's ability to meet its interest payments on outstanding debt. A higher interest coverage ratio is generally preferable as it shows that the company is more capable of servicing its debt obligations.
For Medtronic PLC, the interest coverage ratio has shown a decreasing trend over the period analyzed. In April 2023, the interest coverage ratio was 9.39, indicating that the company generated operating income 9.39 times higher than its interest expenses. However, this ratio declined slightly to 9.08 in April 2023.
Subsequently, there was a more significant drop in the interest coverage ratio in April 2024 to 7.69, and a slight increase to 7.73 in the same year. This downward trend raises concerns about the company's ability to comfortably cover its interest payments from operating income.
Finally, the interest coverage ratio in April 2025 was reported as 0.00, which could indicate either a substantial decrease in operating income or a significant increase in interest expenses, or perhaps both. An interest coverage ratio of 0.00 implies that the company's operating income is insufficient to cover its interest expenses, posing a potentially risky situation in terms of debt servicing.
Overall, the declining trend in Medtronic PLC's interest coverage ratio suggests a potential strain on the company's ability to meet its interest obligations from operating profits. This declining trend warrants further investigation into the company's financial health and debt management strategies.