SolarEdge Technologies Inc (SEDG)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.14 | 0.15 | 0.43 | 0.47 | 0.00 |
| Debt-to-capital ratio | 0.21 | 0.22 | 0.49 | 0.51 | 0.00 |
| Debt-to-equity ratio | 0.26 | 0.29 | 0.95 | 1.06 | 0.00 |
| Financial leverage ratio | 1.90 | 1.96 | 2.21 | 2.24 | 1.84 |
Solaredge Technologies Inc has demonstrated a consistent improvement in its solvency ratios over the past five years. The debt-to-assets ratio, which measures the proportion of total assets financed by debt, has decreased steadily from 0.25 in 2020 to 0.15 in 2023, indicating a stronger financial position and lower reliance on debt financing.
Similarly, the debt-to-capital ratio, measuring the proportion of capital funded by debt, has shown a declining trend from 0.36 in 2020 to 0.22 in 2023. This suggests that the company has reduced its dependence on debt to finance its operations and investments.
The debt-to-equity ratio, reflecting the extent to which the company's operations are financed by debt versus equity, has also improved significantly over the years. From a high of 0.57 in 2019, the ratio has decreased to 0.28 in 2023, signaling a better balance between debt and equity in the company's capital structure.
The financial leverage ratio, which indicates the company's ability to meet its financial obligations through leveraging its assets, has shown a downward trend from 2.24 in 2020 to 1.90 in 2023. This decline suggests that Solaredge Technologies Inc has managed to reduce its financial leverage and improve its overall financial stability and ability to cover its debt obligations.
Overall, the solvency ratios of Solaredge Technologies Inc demonstrate a positive trajectory, indicating a stronger financial position, improved capital structure, and enhanced ability to meet its financial obligations.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 64.63 | 108.58 | 30.36 | 31.71 | 38.50 |
The interest coverage ratio for Solaredge Technologies Inc has shown a declining trend over the past five years. In 2019, the interest coverage ratio was notably high at 930.77, indicating a strong ability to cover interest expenses with operating income. However, this ratio has decreased significantly to 323.56 in 2020 and further to 61.27 in 2021, reflecting a potential increase in interest expenses relative to operating income.
Unfortunately, the interest coverage ratio for 2022 and 2023 is not provided in the table, making it difficult to assess the current financial health of the company in terms of its ability to meet interest obligations. Nonetheless, the decreasing trend observed from 2019 to 2021 raises concerns about the company's ability to comfortably cover its interest expenses with its operating income over the specified period.
Further analysis of Solaredge Technologies Inc's financial statements and other relevant financial metrics would be necessary to gain a more comprehensive understanding of the company's overall financial performance and debt management.