SolarEdge Technologies Inc (SEDG)
Solvency ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.13 | 0.12 | 0.16 | 0.15 | 0.14 | 0.13 | 0.13 | 0.14 | 0.15 | 0.16 | 0.17 | 0.17 | 0.43 | 0.23 | 0.24 | 0.25 | 0.47 | 0.25 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.33 | 0.26 | 0.23 | 0.22 | 0.21 | 0.20 | 0.20 | 0.21 | 0.22 | 0.23 | 0.24 | 0.24 | 0.49 | 0.33 | 0.34 | 0.36 | 0.51 | 0.36 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.50 | 0.34 | 0.30 | 0.28 | 0.26 | 0.25 | 0.25 | 0.27 | 0.29 | 0.30 | 0.31 | 0.31 | 0.95 | 0.50 | 0.53 | 0.56 | 1.06 | 0.55 | 0.00 | 0.00 |
| Financial leverage ratio | 4.00 | 2.94 | 1.87 | 1.86 | 1.90 | 1.87 | 1.86 | 1.91 | 1.96 | 1.90 | 1.86 | 1.83 | 2.21 | 2.14 | 2.18 | 2.24 | 2.24 | 2.21 | 1.74 | 1.75 |
SolarEdge Technologies Inc has shown a consistent improvement in its solvency ratios over the years. The Debt-to-assets ratio has decreased steadily from 0.47 as of December 31, 2020, to 0.13 as of December 31, 2024, indicating a healthier balance between debt and total assets. Similarly, the Debt-to-capital ratio has declined from 0.51 to 0.13 over the same period, reflecting a reduction in financial leverage.
The Debt-to-equity ratio has also seen a positive trend, dropping from 1.06 to 0.50 during the analyzed period. This signifies that the company has been relying less on debt financing and has increased its equity compared to its debt levels. The Financial leverage ratio, which measures the proportion of debt in the company's capital structure, has fluctuated but has generally decreased from 2.24 as of December 31, 2020, to 4.00 as of December 31, 2024, indicating a significant increase in equity financing.
Overall, these solvency ratios suggest that SolarEdge Technologies Inc has been effectively managing its debt levels and financial leverage, gradually improving its financial stability and reducing its reliance on debt financing. This trend is generally positive and indicates a strengthening financial position for the company.
Coverage ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | — | -209.69 | -37.22 | -17.57 | 1.02 | 8.59 | 6.59 | 3.65 | 3.14 | 4.04 | 9.83 | 34.64 | 142.85 | 31.37 | 24.92 | 22.60 | 29.59 | 33.69 | 41.63 | 46.79 |
The interest coverage ratio indicates the ability of SolarEdge Technologies Inc to cover its interest expenses with its operating income. Looking at the historical trend of the interest coverage ratio from March 31, 2020, to December 31, 2024, we observe the following:
- The interest coverage ratio was consistently above 20x from March 2020 to June 2021, indicating a strong ability to meet interest obligations comfortably.
- However, there was a notable decline in the interest coverage ratio from March 2021 to June 2022, reaching a low of 9.83x in the second quarter of 2022, suggesting a potential strain on the company's ability to cover its interest expenses.
- The interest coverage ratio further deteriorated significantly in the subsequent quarters, dropping to negative values from March 2023 to September 2024. This negative trend indicates that SolarEdge Technologies Inc was not generating enough operating income to cover its interest payments during these periods.
- The interest coverage ratio improved drastically to 1.02x by December 31, 2023, and then fell to negative values again in the subsequent quarters, hitting its lowest point of -209.69x in September 2024, which suggests a severe financial strain on the company.
- The interest coverage ratio data for December 31, 2024, appears to be missing in the provided dataset, indicating a potential issue with data reporting or availability for that period.
In summary, the historical interest coverage ratio of SolarEdge Technologies Inc fluctuated over the period analyzed, demonstrating both strong and weak periods in terms of the company's ability to cover its interest expenses with operating income. The negative trend in recent quarters raises concerns about the company's financial health and its ability to service its debt obligations.