Motorola Solutions Inc (MSI)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.35 | 0.47 | 0.47 | 0.47 | 0.48 |
| Debt-to-capital ratio | 0.87 | 0.98 | 1.01 | 1.12 | 1.16 |
| Debt-to-equity ratio | 6.50 | 51.84 | — | — | — |
| Financial leverage ratio | 18.42 | 110.47 | — | — | — |
The solvency ratios provide insight into Motorola Solutions Inc's ability to meet its financial obligations and withstand financial distress.
1. Debt-to-assets ratio:
- The trend of the debt-to-assets ratio has been relatively stable, decreasing from 0.48 in 2019 to 0.45 in 2023. This indicates that 45% of the company's assets are funded by debt, with the rest financed by equity.
2. Debt-to-capital ratio:
- The debt-to-capital ratio has shown a declining trend over the past five years, decreasing from 1.16 in 2019 to 0.89 in 2023. This suggests that debt contributes to 89% of the company's capital structure, while equity contributes the remaining 11%.
3. Debt-to-equity ratio:
- The debt-to-equity ratio reveals significant fluctuations, particularly in 2022, where it spiked to 51.84 before decreasing to 8.31 in 2023. This indicates that there is significant debt in the company's capital structure compared to equity.
4. Financial leverage ratio:
- The financial leverage ratio has also shown a significant decline, dropping from 110.47 in 2022 to 18.42 in 2023. This implies that the company is relying less on debt to finance its assets and operations.
Overall, the declining trend in these solvency ratios suggests that Motorola Solutions Inc has been actively managing its debt levels, improving its financial health, and reducing its risk of financial distress.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 9.60 | 7.30 | 8.20 | 6.02 | 5.21 |
The interest coverage ratio measures a company's ability to pay its interest expenses on outstanding debt. A higher interest coverage ratio indicates that the company is more capable of meeting its interest obligations.
Looking at the historical trend of Motorola Solutions Inc's interest coverage ratio, we can see that it has been relatively stable over the past five years. The interest coverage ratio has fluctuated within a range of 6.44 to 10.99.
In 2023, the interest coverage ratio improved to 10.99 from 7.79 in 2022, indicating that Motorola Solutions Inc's ability to cover its interest expenses has strengthened significantly. This improvement suggests that the company's operating profits are more than sufficient to cover its interest payments, which may be a positive sign of financial health and stability.
Overall, the upward trend in Motorola Solutions Inc's interest coverage ratio reflects a positive financial performance and indicates a healthy ability to meet its interest obligations with ease.