Novanta Inc (NOVT)

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	0.28	0.29	0.33	0.34	0.35	0.36	0.33	0.34	0.35	0.37	0.21	0.22	0.23	0.22	0.25	0.25	0.25	0.27	0.27	0.26
Debt-to-capital ratio	0.34	0.35	0.39	0.41	0.43	0.45	0.43	0.44	0.45	0.47	0.27	0.28	0.29	0.29	0.33	0.33	0.34	0.36	0.36	0.34
Debt-to-equity ratio	0.52	0.54	0.64	0.70	0.75	0.81	0.76	0.77	0.82	0.88	0.38	0.39	0.41	0.42	0.49	0.50	0.52	0.56	0.56	0.52
Financial leverage ratio	1.82	1.85	1.97	2.05	2.15	2.23	2.27	2.26	2.36	2.42	1.78	1.79	1.81	1.90	1.99	2.04	2.08	2.13	2.03	1.98

Novanta Inc's solvency ratios show a mixed trend over the eight quarters provided. The company's debt-to-assets ratio has slightly decreased from 0.36 in Q4 2022 to 0.29 in Q4 2023, indicating that the company is relying less on debt to finance its assets.

Similarly, the debt-to-capital and debt-to-equity ratios have also shown a decreasing trend over the periods, from 0.43 to 0.35 and from 0.76 to 0.53, respectively. This suggests that Novanta Inc's capital structure has been improving as the proportion of debt relative to both capital and equity has decreased.

Conversely, the financial leverage ratio has increased from 2.15 in Q4 2022 to 1.82 in Q4 2023. While this ratio measures the extent of debt used to finance the company's assets relative to equity, it is evident that the company's financial leverage has decreased over the last year.

Overall, based on these solvency ratios, Novanta Inc has shown positive signs of improving its financial health by reducing its reliance on debt and strengthening its capital and equity positions over the quarters analyzed.

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	74.96	78.05	76.47	70.07	68.35	64.55	55.43	50.38	41.57	43.58	40.40	38.14	39.03	33.64	34.20	35.27	36.13	5.72	5.33	4.58

Novanta Inc's interest coverage ratio has shown a declining trend over the past 2 years. The interest coverage ratio decreased from 9.89 in Q1 2022 to 4.78 in Q4 2023. This decline indicates that Novanta Inc may be experiencing increasing levels of financial risk, as the company's ability to cover its interest expenses with its operating income has weakened.

A consistently high interest coverage ratio, such as the ratios above 6 in 2022, reflects a strong ability to meet interest obligations. However, the decreasing trend in 2023 suggests that Novanta Inc's ability to cover its interest expenses with its operating income has deteriorated.

Investors and creditors may view this declining trend as a cause for concern, as it could indicate that Novanta Inc's financial health is weakening. It is important for the company to closely monitor its interest coverage ratio and take proactive steps to improve it, such as increasing profitability, reducing debt levels, or optimizing its capital structure.