Merit Medical Systems Inc (MMSI)

The solvency ratios of Merit Medical Systems, Inc. provide insights into the company's ability to meet its long-term financial obligations and overall financial stability.

1. Debt-to-assets ratio: This ratio measures the proportion of total assets financed by debt. From 2019 to 2023, the trend shows an increase in the debt-to-assets ratio, indicating that a higher percentage of the company's assets are funded by debt. In 2023, the ratio stands at 0.35, implying that 35% of the company's assets are funded by debt.

2. Debt-to-capital ratio: This ratio assesses the extent of capital funding provided by debt. Similar to the debt-to-assets ratio, the debt-to-capital ratio also shows an upward trend over the five-year period. The ratio reached 0.41 in 2023, suggesting that 41% of the company's capital structure is attributed to debt financing.

3. Debt-to-equity ratio: The debt-to-equity ratio indicates the degree of financial leverage, with higher values possibly indicating higher financial risk. The trend in this ratio also demonstrates an increase over the years, with the ratio climbing to 0.68 in 2023. This implies that for every dollar of equity, the company has $0.68 in debt.

4. Financial leverage ratio: The financial leverage ratio provides a broader view of the company's overall financial leverage. The ratio has been increasing consistently from 1.45 in 2019 to 1.93 in 2023. This indicates that the company's reliance on debt to support its operations and growth has been increasing.

Overall, the rising trend in these solvency ratios suggests that Merit Medical Systems, Inc. has been increasingly using debt to finance its operations and expansion. While debt can offer leverage for growth opportunities, it also introduces financial risk, as higher debt levels can strain the company's ability to service its debt obligations, especially in challenging economic conditions. It would be important for stakeholders to monitor these solvency ratios closely to assess the company's ability to manage its debt levels effectively and sustain its financial health in the long run.

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Coverage ratios

Merit Medical Systems, Inc. has exhibited varying levels of interest coverage over the past five years. The interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt using its operating income. A higher interest coverage ratio indicates a greater ability to fulfill interest obligations.

In 2023, the interest coverage ratio stands at 9.76, showing a moderate decrease compared to the previous year but still indicating that the company's operating income is sufficient to cover its interest expenses. The ratio was notably higher in 2022 and 2021, at 17.13 and 17.45, respectively, suggesting a strong ability to cover interest payments during those years.

However, in 2020 and 2019, Merit Medical Systems, Inc. had lower interest coverage ratios of 4.89 and 3.11, respectively. These lower ratios indicate a relatively weaker ability to cover interest expenses with operating income during those years.

Overall, the trend in Merit Medical Systems, Inc.'s interest coverage ratios shows fluctuations over the past five years, with the company demonstrating both strengths and weaknesses in its ability to meet interest obligations with operating income. Monitoring this ratio over time is crucial for assessing the company's financial health and ability to manage its debt effectively.