ON Semiconductor Corporation (ON)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.24 | 0.19 | 0.25 | 0.30 | 0.34 |
| Debt-to-capital ratio | 0.28 | 0.25 | 0.33 | 0.39 | 0.46 |
| Debt-to-equity ratio | 0.38 | 0.33 | 0.49 | 0.64 | 0.84 |
| Financial leverage ratio | 1.60 | 1.70 | 1.94 | 2.10 | 2.45 |
ON Semiconductor Corporation's solvency ratios reflect a consistent improvement in the company's financial health over the years.
1. Debt-to-assets ratio has decreased from 0.34 in 2020 to 0.24 in 2024, indicating that the company has been successful in reducing its debt relative to its total assets.
2. Debt-to-capital ratio has also shown a decline, decreasing from 0.46 in 2020 to 0.28 in 2024. This implies that the proportion of the company's capital financed by debt has been decreasing, which is a positive sign for investors and creditors.
3. Debt-to-equity ratio has decreased from 0.84 in 2020 to 0.38 in 2024, showing a significant improvement in the company's ability to cover its liabilities through equity. This indicates a lower dependency on debt for financing operations.
4. Financial leverage ratio has progressively declined from 2.45 in 2020 to 1.60 in 2024, suggesting that the company is utilizing less debt to generate earnings and support its operations. A lower financial leverage ratio indicates a stronger financial position and lower risk of default.
Overall, the trend of decreasing solvency ratios over the years for ON Semiconductor Corporation reflects a positive trajectory in terms of the company's ability to meet its financial obligations and maintain a healthy financial structure.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 159.25 | 34.88 | 25.87 | 9.87 | 2.04 |
The interest coverage ratio for ON Semiconductor Corporation has shown a significant improvement over the years. As of December 31, 2020, the company's interest coverage was 2.04, indicating that the company's operating income was just sufficient to cover its interest expenses. However, by December 31, 2024, the interest coverage ratio had risen sharply to 159.25. This substantial increase suggests that ON Semiconductor Corporation's operating income has significantly outpaced its interest expenses, demonstrating a strong ability to meet its interest payments comfortably. Overall, the improving trend in the interest coverage ratio reflects a positive financial performance and a reduced risk of default due to insufficient operating income.