EchoStar Corporation (SATS)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.31 | 0.32 | 0.25 | 0.21 | 0.33 |
| Debt-to-capital ratio | 0.47 | 0.47 | 0.31 | 0.30 | 0.39 |
| Debt-to-equity ratio | 0.90 | 0.87 | 0.45 | 0.42 | 0.65 |
| Financial leverage ratio | 2.87 | 2.73 | 1.80 | 2.00 | 1.95 |
Solvency ratios provide insight into a company's ability to meet its long-term financial obligations. Looking at the solvency ratios of EchoStar Corporation over the past five years, we observe the following trends:
1. Debt-to-assets ratio: This ratio indicates the proportion of the company's assets financed by debt. EchoStar's debt-to-assets ratio has fluctuated between 0.21 and 0.33 over the five-year period. The decreasing trend from 2020 to 2021 suggests that EchoStar has been relying less on debt to fund its assets.
2. Debt-to-capital ratio: The debt-to-capital ratio reflects the percentage of the company's capital structure that is funded by debt. EchoStar's debt-to-capital ratio has remained relatively stable between 0.30 and 0.47, indicating a consistent reliance on debt for capital financing.
3. Debt-to-equity ratio: This ratio compares a company's total debt to its shareholders' equity. The significant increase in EchoStar's debt-to-equity ratio from 2020 to 2021 suggests a higher level of leverage, which could potentially increase financial risk.
4. Financial leverage ratio: The financial leverage ratio measures the proportion of a company's assets that are financed by debt relative to equity. EchoStar's financial leverage ratio has shown some fluctuations but has generally stayed within the range of 1.80 to 2.87. This indicates that EchoStar has been leveraging its equity with debt to fund its operations and investments.
Overall, EchoStar Corporation's solvency ratios indicate a moderate level of leverage and debt usage over the past five years. The trends suggest a mix of debt and equity financing strategies which should be monitored to ensure the company maintains a healthy balance sheet and the ability to meet its long-term financial obligations.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | -2.66 | 3.32 | 2.27 | 0.76 | 0.83 |
The interest coverage of EchoStar Corporation has shown varying trends over the past five years. In 2023, the interest coverage ratio was -2.66, indicating that the company's operating income was not sufficient to cover its interest expenses. This is a concerning sign as a negative coverage ratio implies financial distress.
In 2022, the interest coverage improved to 3.32, which suggests that the company's operating income was more than enough to cover its interest expenses. This indicates a healthier financial position compared to the previous year.
Similarly, in 2021, the interest coverage ratio was 2.27, showing that the company had a comfortable margin to cover its interest obligations. This can be considered a positive development in terms of financial stability.
However, in 2020 and 2019, the interest coverage ratios were significantly lower at 0.76 and 0.83, respectively. These low ratios indicate that EchoStar Corporation struggled to generate sufficient operating income to cover its interest payments during those years, raising concerns about its financial health and ability to meet debt obligations.
Overall, the fluctuating interest coverage ratios of EchoStar Corporation suggest varying levels of financial performance and debt servicing capability over the past five years. Monitoring this ratio closely will be essential for evaluating the company's financial health and risk management going forward.