Perrigo Company PLC (PRGO)

Perrigo Company plc's solvency ratios provide insights into the company's ability to meet its long-term financial obligations and manage its debt levels effectively.

1. Debt-to-assets ratio: This ratio shows the proportion of Perrigo's assets financed by debt. The trend indicates an increasing reliance on debt to finance assets, with the ratio rising from 0.30 in 2019 to 0.38 in 2023.

2. Debt-to-capital ratio: This ratio reflects the percentage of Perrigo's capital structure that is debt. The relatively stable trend suggests that Perrigo maintains a consistent level of debt in its overall capital structure, hovering around 0.46 over the past few years.

3. Debt-to-equity ratio: This ratio measures the amount of debt relative to equity, indicating the company's leverage position. Perrigo's increasing debt-to-equity ratio over the years (from 0.58 in 2019 to 0.85 in 2023) suggests a higher level of debt financing compared to equity.

4. Financial leverage ratio: This ratio calculates the amount of assets supported by the company's equity. Perrigo's increasing financial leverage ratio over the years (from 1.95 in 2019 to 2.27 in 2023) indicates an escalating amount of assets financed by equity.

Overall, the solvency ratios paint a picture of Perrigo Company plc's evolving capital structure and debt management strategies. It is essential for investors and stakeholders to monitor these ratios to assess Perrigo's ability to withstand financial challenges and maintain financial stability over the long term.

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Coverage ratios

The interest coverage ratio for Perrigo Company plc has fluctuated over the past five years, ranging from a low of 0.78 in 2022 to a high of 4.80 in 2021. A lower ratio indicates that the company may have difficulty meeting its interest obligations with its operating income, which was the case in 2022. However, the ratio improved significantly in 2023 to 1.63, suggesting a better ability to cover interest expenses with operating profits. Overall, while the company's interest coverage has shown variability, it has generally remained above 1 in recent years, indicating that Perrigo has been able to meet its interest payments, although with varying levels of ease.