Organon & Co (OGN)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | — | — | — | — |
| Debt-to-equity ratio | 0.00 | — | — | — | — |
| Financial leverage ratio | 27.76 | — | — | — | — |
Based on the provided data for Organon & Co's solvency ratios:
1. Debt-to-assets ratio: Organon & Co has consistently maintained a debt-to-assets ratio of 0.00% from December 31, 2020, to December 31, 2024. This indicates that the company's total debt is negligible compared to its total assets, suggesting a low risk of insolvency related to debt obligations.
2. Debt-to-capital ratio: From December 31, 2020, to December 31, 2023, the debt-to-capital ratio was not available ("—"), and it improved to 0.00% as of December 31, 2024. This signifies that the company has minimal debt in relation to its capital structure, further supporting a strong solvency position.
3. Debt-to-equity ratio: Similar to the debt-to-capital ratio, the debt-to-equity ratio was missing data for the years up to December 31, 2023, followed by a reading of 0.00% on December 31, 2024. This ratio reaffirms the company's conservative use of debt financing and a healthy balance between debt and equity.
4. Financial leverage ratio: The financial leverage ratio, calculated as total assets divided by total equity, was not available for the years up to December 31, 2023. However, as of December 31, 2024, the financial leverage ratio stood at 27.76, indicating that the company is utilizing its equity effectively to generate returns and has a sound financial structure.
In conclusion, based on the solvency ratios provided, Organon & Co appears to have a robust financial position with minimal debt relative to assets, capital, and equity. The financial leverage ratio suggests that the company is strategically leveraging its equity to support its operations and investments.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 2.55 | 2.28 | 3.50 | 6.28 | 474.50 |
The interest coverage ratio of Organon & Co has shown a significant decline over the years based on the data provided. In December 31, 2020, the interest coverage ratio was a robust 474.50, indicating a very strong ability to cover interest obligations from operating income. However, there has been a substantial decrease in this ratio in subsequent years. By December 31, 2021, the ratio dropped sharply to 6.28, highlighting a potential strain on the company's ability to cover its interest expenses.
This downward trend continued with further reductions in the interest coverage ratio to 3.50 by December 31, 2022, 2.28 by December 31, 2023, and 2.55 by December 31, 2024. These declining ratios suggest that Organon & Co may be facing challenges in generating sufficient operating income to cover its interest payments, potentially indicating a higher risk of default or financial distress.
It is crucial for the company's management to closely monitor this trend and take appropriate measures to improve the interest coverage ratio to ensure financial stability and sustainability in the long run.