ON Semiconductor Corporation (ON)

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 0.19 0.19 0.20 0.21 0.25 0.27 0.28 0.30 0.30 0.33 0.34 0.33 0.34 0.38 0.42 0.43 0.34 0.34 0.42 0.35
Debt-to-capital ratio 0.25 0.25 0.27 0.28 0.33 0.35 0.36 0.38 0.39 0.41 0.43 0.44 0.46 0.51 0.56 0.56 0.47 0.47 0.52 0.45
Debt-to-equity ratio 0.33 0.34 0.36 0.39 0.49 0.54 0.57 0.61 0.64 0.71 0.77 0.77 0.84 1.03 1.25 1.26 0.87 0.90 1.08 0.83
Financial leverage ratio 1.70 1.77 1.83 1.90 1.94 1.96 2.00 2.04 2.10 2.17 2.27 2.38 2.45 2.70 2.94 2.93 2.55 2.65 2.60 2.37

Solvency ratios provide insights into a company's ability to meet its long-term financial obligations. Looking at the solvency ratios of ON Semiconductor Corp. over the past eight quarters, we observe the following trends:

1. Debt-to-assets ratio: This ratio measures the proportion of a company's assets financed by debt. ON Semiconductor Corp. has maintained a relatively stable debt-to-assets ratio, hovering between 0.25 and 0.31 over the past two years. This suggests that the company has been effectively managing its debt levels in relation to its total assets.

2. Debt-to-capital ratio: The debt-to-capital ratio reflects the portion of a company's capital structure that is financed by debt. ON Semiconductor Corp.'s debt-to-capital ratio has also remained relatively consistent, ranging from 0.30 to 0.39 during the same period. This indicates that the company has maintained a stable balance between debt and equity in its capital structure.

3. Debt-to-equity ratio: The debt-to-equity ratio compares a company's total debt to its shareholder equity. ON Semiconductor Corp. has shown a slight upward trend in its debt-to-equity ratio, increasing from 0.43 to 0.64 over the past two years. This may indicate a higher reliance on debt financing compared to equity.

4. Financial leverage ratio: The financial leverage ratio provides an indication of the company's ability to meet its financial obligations through debt financing. ON Semiconductor Corp. has seen a gradual increase in its financial leverage ratio, rising from 1.70 to 2.04 since the beginning of 2022. This suggests that the company's reliance on debt has been growing, which could increase financial risk.

In summary, ON Semiconductor Corp. has maintained stable debt-to-assets and debt-to-capital ratios, while experiencing an increasing trend in its debt-to-equity and financial leverage ratios. It is essential for stakeholders to monitor these trends to assess the company's long-term financial health and risk profile.

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 34.88 32.06 26.49 23.86 25.87 21.75 19.84 15.22 9.87 6.78 4.43 2.84 2.04 1.81 0.85 1.63 2.85 3.74 6.26 6.83

Interest coverage is a financial ratio used to assess a company's ability to meet its interest obligations on its outstanding debt. It is calculated by dividing a company's earnings before interest and taxes (EBIT) by its interest expense, with a higher ratio indicating a better ability to cover interest payments.

In the case of ON Semiconductor Corp., the interest coverage ratio has demonstrated a positive trend over the past eight quarters. The ratio increased from 15.57 in Q1 2022 to a peak of 253.46 in Q3 2023, showcasing a substantial improvement in the company's ability to cover its interest expenses.

This improvement suggests that ON Semiconductor Corp. has been generating strong earnings relative to its interest obligations, indicating a healthier financial position and reduced risk of default on its debt. A higher interest coverage ratio also provides investors and creditors with confidence in the company's ability to manage its debt effectively and support its overall financial health.

Overall, the upward trend in interest coverage ratio for ON Semiconductor Corp. reflects a positive trajectory in the company's financial performance and debt management capabilities.

See also:

ON Semiconductor Corporation Solvency Ratios (Quarterly Data)