Ormat Technologies Inc (ORA)
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 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 1.24 | 2.25 | 2.47 | 2.39 | 2.15 |
Ormat Technologies Inc has consistently maintained a healthy solvency position over the period from December 31, 2020, to December 31, 2024, as indicated by its solvency ratios.
1. Debt-to-assets ratio: The company has maintained a debt-to-assets ratio of 0.00 throughout the period. This implies that the company's total debt is effectively non-existent compared to its total assets, indicating a strong financial position with little reliance on external debt to finance its operations.
2. Debt-to-capital ratio: Similarly, the debt-to-capital ratio remained at 0.00 consistently across the years. This ratio also highlights the company's minimal utilization of debt in its capital structure, further reflecting a conservative approach to financial leverage.
3. Debt-to-equity ratio: The debt-to-equity ratio was also stable at 0.00 throughout the years. This suggests that Ormat Technologies Inc has no significant debt in relation to its equity, portraying a low-risk financial structure and a high level of financial stability.
4. Financial leverage ratio: The financial leverage ratio ranged from 1.24 to 2.47 during the period. Although there was some fluctuation in this ratio, it remained relatively low, indicating that the company relies more on equity financing than debt to support its assets and operations.
In summary, Ormat Technologies Inc's solvency ratios demonstrate a strong financial position with minimal debt burden and a conservative capital structure. This stability in solvency ratios indicates the company's ability to meet its financial obligations and suggests a low risk of financial distress.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 1.86 | 2.41 | 2.09 | 2.25 | 3.16 |
The interest coverage ratio measures a company's ability to meet its interest obligations with its operating income. For Ormat Technologies Inc, the trend in interest coverage ratios from 2020 to 2024 shows a slight decline. In 2020, the interest coverage ratio was 3.16, indicating that the company's operating income was able to cover its interest expense 3.16 times. However, this ratio decreased to 1.86 by the end of 2024.
A higher interest coverage ratio is generally preferred as it signifies a company's stronger ability to pay its interest costs. The decreasing trend in Ormat Technologies Inc's interest coverage ratio may raise concerns about its ability to comfortably meet its interest obligations from its operating income in the future. It indicates a potential strain on the company's financial health and efficiency in managing its debt levels.
Investors and creditors typically monitor the interest coverage ratio closely as it reflects the company's financial risk and its capacity to service its debt effectively. Ormat Technologies Inc may need to focus on improving its operating performance or managing its debt levels to enhance its ability to cover interest expenses and maintain financial stability.