Envista Holdings Corp (NVST)

Envista Holdings Corp's solvency ratios have shown some fluctuations over the years.

- The Debt-to-assets ratio has remained relatively stable at around 0.13 from 2020 to 2022, but it increased to 0.21 in 2023 and further to 0.24 in 2024. This indicates that the company has increased its reliance on debt to finance its assets over the last two years.

- The Debt-to-capital ratio decreased from 0.20 in 2020 to 0.17 in 2022, but then rose to 0.30 by the end of 2024. This suggests that the proportion of debt in Envista's capital structure has been increasing, which could potentially increase financial risk.

- The Debt-to-equity ratio followed a similar trend, declining from 0.24 in 2020 to 0.21 in 2022, then sharply increasing to 0.44 by the end of 2024. This indicates a significant increase in the company's debt relative to its equity, which may raise concerns about its financial health and stability.

- The Financial leverage ratio decreased from 1.85 in 2020 to 1.57 in 2022, but then increased to 1.82 by the end of 2024. This ratio measures the company's use of debt to support its assets and indicates that Envista has been adjusting its leverage levels over the years.

Overall, the increasing trend in debt ratios and financial leverage ratio suggest that Envista Holdings Corp's solvency position may be weakening, as the company appears to be taking on more debt relative to its assets, capital, and equity. This could potentially raise concerns about the company's ability to meet its debt obligations in the future.

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Coverage ratios

Based on the provided data, Envista Holdings Corp's interest coverage ratio has fluctuated significantly over the past five years.

As of December 31, 2020, the interest coverage ratio was extremely low at 0.53, indicating that the company may have had difficulties meeting its interest payment obligations with its operating income.

However, there was a substantial improvement by December 31, 2021, with the interest coverage ratio increasing to a healthier level of 7.13. This suggests that Envista Holdings Corp's ability to cover its interest payments improved significantly compared to the previous year.

The trend continued positively over the following years, as shown by the ratios of 8.53 on December 31, 2022, and 0.13 on December 31, 2023. While the ratio dropped in 2023, it remained above 1, indicating that the company's operating income was still sufficient to cover its interest expenses, albeit less comfortably.

However, a significant concern arises from the data for December 31, 2024, where the interest coverage ratio plummeted to -22.38. A negative interest coverage ratio is a red flag, suggesting that Envista Holdings Corp's operating income was insufficient to cover its interest obligations. This could indicate financial distress and the potential need to reevaluate the company's debt levels or operational efficiency.

In conclusion, Envista Holdings Corp's interest coverage has shown fluctuations over the past five years, with improvements in some periods but a concerning drop in 2024. Investors and stakeholders should closely monitor the company's financial health and management of debt to ensure sustainable operations in the future.