Novanta Inc (NOVT)

Solvency ratios

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Debt-to-assets ratio	0.30	0.28	0.35	0.35	0.23
Debt-to-capital ratio	0.36	0.34	0.43	0.45	0.29
Debt-to-equity ratio	0.55	0.52	0.75	0.82	0.41
Financial leverage ratio	1.86	1.82	2.15	2.36	1.81

Novanta Inc's solvency ratios indicate the company's ability to meet its long-term debt obligations.

- The Debt-to-assets ratio increased from 0.23 in 2020 to 0.35 in 2021 and remained relatively stable in 2022 and 2023, before decreasing to 0.30 in 2024. This suggests that the company's debt in relation to its total assets has fluctuated over the years.

- The Debt-to-capital ratio also shows an increasing trend, rising from 0.29 in 2020 to 0.45 in 2021, and then gradually decreasing to 0.36 in 2024. This ratio indicates the proportion of debt in the company's capital structure.

- The Debt-to-equity ratio saw a significant spike in 2021 at 0.82, indicating a high level of debt in relation to equity. This ratio then decreased to 0.55 in 2024, showing an improvement in the company's leverage position.

- The Financial leverage ratio increased from 1.81 in 2020 to 2.36 in 2021 before declining in subsequent years to 1.86 in 2024. This ratio reflects the company's reliance on debt financing.

Overall, Novanta Inc's solvency ratios show fluctuations but demonstrate improvements in leverage and debt management over the years, with a decreasing trend in recent years, indicating a potentially strengthening financial position.

Coverage ratios

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Interest coverage	92.15	74.96	68.35	41.59	39.03

Novanta Inc's interest coverage ratio has shown a consistent improvement over the years based on the data provided. The interest coverage ratio, which measures the company's ability to meet its interest obligations, stood at 39.03 in December 31, 2020, and has steadily increased to 41.59 in December 31, 2021, 68.35 in December 31, 2022, 74.96 in December 31, 2023, and 92.15 in December 31, 2024.

This trend indicates that Novanta Inc has been generating significantly higher earnings relative to its interest expenses, which is a positive sign for the company's financial health. The increasing interest coverage ratio reflects the company's improved ability to service its debt obligations and suggests a stronger financial position. Overall, Novanta Inc's interest coverage ratio portrays a favorable picture of its financial stability and ability to meet its interest payment requirements.