Ormat Technologies Inc (ORA)

Solvency ratios provide insights into a company's ability to meet its long-term financial obligations. Looking at Ormat Technologies Inc's solvency ratios over the past five years, a trend analysis reveals the following:

1. Debt-to-assets ratio: This ratio shows the proportion of a company's assets financed by debt. Ormat's debt-to-assets ratio has fluctuated between 0.38 and 0.44, with a decreasing trend from 2022 to 2023. This indicates that Ormat relies on debt to finance around 40% of its assets, showing a moderate level of leverage.

2. Debt-to-capital ratio: This ratio measures the proportion of a company's capital structure that is debt. Ormat's debt-to-capital ratio has ranged between 0.45 and 0.52, showing a decreasing trend from 2022 to 2023. This suggests that Ormat's capital structure consists of approximately 47% to 52% debt, indicating a moderate level of leverage.

3. Debt-to-equity ratio: This ratio indicates the amount of debt financing compared to equity. Ormat's debt-to-equity ratio has varied from 0.81 to 1.09, with a decreasing trend from 2022 to 2023. This implies that Ormat's debt levels relative to equity have been fluctuating, with a high of 1.09 in 2022, indicating a significant portion of financing is through debt.

4. Financial leverage ratio: This ratio calculates the company's total assets relative to shareholders' equity. Ormat's financial leverage ratio has been between 2.15 and 2.47, showing a decreasing trend from 2022 to 2023. The decreasing trend implies that the company's assets are primarily financed through equity, with a higher ratio indicating a larger proportion financed through debt.

Overall, Ormat Technologies Inc's solvency ratios indicate a moderate level of leverage in its capital structure, with fluctuations in debt levels relative to assets and equity over the past five years. The decreasing trends observed in these ratios from 2022 to 2023 suggest a potential improvement in the company's debt management and leverage position.

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Coverage ratios

The interest coverage ratio for Ormat Technologies Inc has shown a slight decline over the past five years. In 2023, the interest coverage ratio stands at 1.96, a decrease from 2.17 in 2022. This indicates that the company's ability to cover its interest expenses with its operating income has weakened slightly. However, it is important to note that the ratio remains above 1, which indicates that Ormat Technologies Inc is still generating enough operating income to cover its interest payments. Overall, while the decreasing trend raises some concern, the company's interest coverage levels are still at an acceptable range. Further analysis of the company's financial performance and cash flow may provide additional insights into its ability to meet its interest obligations in the future.