Arcus Biosciences Inc (RCUS)
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 | 2.37 | 2.37 | 2.05 | 1.89 | 1.54 |
The solvency ratios of Arcus Biosciences Inc, namely the Debt-to-assets ratio, Debt-to-capital ratio, Debt-to-equity ratio, and Financial leverage ratio, demonstrate a consistent trend of 0.00 across the years from 2020 to 2024.
The Debt-to-assets ratio indicates the proportion of the company's assets financed by debt, and a ratio of 0.00 suggests that Arcus Biosciences Inc has not relied on debt to fund its assets during the specified period.
Similarly, the Debt-to-capital ratio, which measures the proportion of capital that comes from debt financing, also remains at 0.00. This indicates that the company has primarily used equity to fund its operations and growth rather than debt.
The Debt-to-equity ratio, showing the relationship between debt and shareholders' equity, also stays at 0.00 throughout the years. This implies that the company has not taken on significant debt relative to its equity position.
Lastly, the Financial leverage ratio, which indicates the extent to which the company is using debt to finance its operations, shows an increasing trend from 1.54 in 2020 to 2.37 in 2023 and 2024. While this ratio has increased over the years, it is still relatively low and suggests that Arcus Biosciences Inc has maintained a conservative approach to leverage.
Overall, the consistent low values of the solvency ratios indicate that Arcus Biosciences Inc has a strong financial position with minimal reliance on debt for its operations and growth, which can be seen as a positive sign of financial stability and solvency.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | -165.00 | -170.00 | -140.00 | 207.69 | — |
Interest coverage ratio is a financial metric used to evaluate a company's ability to pay its interest expenses on outstanding debt. A higher interest coverage ratio indicates a company is more capable of servicing its debt obligations.
Based on the provided data for Arcus Biosciences Inc:
- As of December 31, 2020, the interest coverage ratio is not available ("—"), indicating that there might not have been any interest expenses or the company's earnings were insufficient to cover the interest payments.
- As of December 31, 2021, the interest coverage ratio improved significantly to 207.69, suggesting that the company's earnings are more than sufficient to cover its interest expenses by over 200 times.
- However, the interest coverage ratio declined sharply in the following years:
- As of December 31, 2022, the interest coverage ratio dropped to -140.00, indicating that the company's earnings may not be enough to cover its interest payments, potentially signaling financial strain.
- As of December 31, 2023, the interest coverage ratio further decreased to -170.00, reinforcing concerns about the company's ability to meet its interest obligations.
- As of December 31, 2024, the interest coverage ratio remained in negative territory at -165.00, highlighting ongoing challenges in covering interest expenses with current earnings.
Overall, the trend in Arcus Biosciences Inc's interest coverage ratio shows a significant improvement in 2021 but subsequent deterioration, raising red flags about the company's financial health and its ability to meet interest payments through operating earnings alone. Investors and creditors may view the declining interest coverage ratio as a risk factor indicating potential financial difficulties for the company.