MKS Instruments Inc (MKSI)
Solvency ratios
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.54 | 0.55 | 0.55 | 0.45 | 0.45 | 0.00 | 0.00 | 0.00 | 0.18 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.67 | 0.67 | 0.67 | 0.53 | 0.53 | 0.00 | 0.00 | 0.00 | 0.22 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 2.00 | 2.04 | 2.03 | 1.14 | 1.14 | 0.00 | 0.00 | 0.00 | 0.29 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 3.69 | 3.69 | 3.70 | 2.55 | 2.56 | 2.74 | 1.52 | 1.54 | 1.57 | 1.60 | 1.61 | 1.63 | 1.65 | 1.68 | 1.71 | 1.69 | 1.69 | 1.70 | 1.74 | 1.78 |
The solvency ratios of MKS Instruments Inc indicate the company's ability to meet its long-term financial obligations. The debt-to-assets ratio has been relatively stable, ranging from 0.45 to 0.55, suggesting that around 45% to 55% of the company's assets are financed by debt. This indicates moderate reliance on debt to fund its operations.
The debt-to-capital ratio also shows consistency, ranging from 0.53 to 0.67. This ratio indicates that approximately 53% to 67% of the company's capital structure is comprised of debt. This suggests that MKS Instruments Inc has a balanced mix of debt and equity in its capital structure.
The debt-to-equity ratio, which has varied between 1.14 and 2.04, shows how heavily the company is leveraged. A higher ratio indicates higher financial risk as it implies that a larger portion of the company's assets is financed by debt rather than equity. The fluctuations in this ratio may reflect changes in the company's financial strategy or performance.
The financial leverage ratio, which measures the company's total debt relative to its equity, shows a slight increase over the periods analyzed, ranging from 1.52 to 3.70. This indicates that MKS Instruments Inc has been taking on more debt relative to its equity over time, potentially increasing its financial risk.
Overall, while MKS Instruments Inc maintains a reasonable level of debt in its capital structure, the increasing trend in the debt-to-equity ratio and financial leverage ratio should be monitored for potential impacts on the company's financial health and risk profile.
Coverage ratios
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | -4.42 | -4.09 | -4.23 | 1.71 | 3.45 | 6.51 | 27.84 | 29.62 | 28.67 | 26.79 | 23.87 | 19.77 | 15.59 | 11.72 | 8.40 | 6.55 | 5.03 | 6.46 | 10.30 | 18.97 |
Interest coverage ratio measures a company's ability to cover its interest expenses with its operating income. A higher interest coverage ratio is generally preferable as it indicates a company is more capable of meeting its interest obligations.
Analyzing the interest coverage ratio of MKS Instruments Inc over the past five years reveals fluctuations in its ability to cover interest expenses. The ratio was negative in recent quarters, indicating that the company's operating income was insufficient to cover its interest expenses during those periods. However, there was a significant improvement in the ratio in the earlier quarters, indicating that the company had strong operating income relative to its interest expenses.
The sharp decrease in interest coverage from the first quarter of 2022 to the fourth quarter of 2023 is a cause for concern as it suggests a deterioration in the company's ability to service its debt obligations. Management should closely monitor this trend and take necessary steps to improve the company's financial health and ensure it can meet its interest payments in the future.