Solventum Corp. (SOLV)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | — |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | — |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | — |
| Financial leverage ratio | 4.22 | 1.16 | 1.17 | — |
Solventum Corp. has consistently maintained a debt-to-assets, debt-to-capital, and debt-to-equity ratio of 0.00 for the past three years, indicating a debt-free capital structure. This signifies that the company relies more on its equity and retained earnings to fund its operations and growth rather than taking on debt.
However, the financial leverage ratio has shown significant fluctuations over the same period. In 2020, the financial leverage ratio was 4.22, indicating a relatively high level of leverage and financial risk. This was followed by a sharp decrease in 2022 and 2021, where the financial leverage ratio was 1.16 and 1.17, respectively. These lower ratios suggest a reduced reliance on debt financing compared to 2020.
Overall, Solventum Corp.'s solvency ratios indicate a strong financial position with a low debt burden and a decreasing trend in financial leverage, highlighting the company's ability to meet its financial obligations with a conservative capital structure.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|
| Interest coverage | — | — | — | — |
Unfortunately, the given table does not provide any specific data on Solventum Corp.'s interest coverage ratio for the years 2020 to 2023. The interest coverage ratio is a financial metric used to evaluate a company's ability to meet its interest payments on outstanding debt. It is calculated by dividing earnings before interest and taxes (EBIT) by the interest expense.
Without the actual values for EBIT and interest expense, it is not possible to calculate or analyze Solventum Corp.'s interest coverage ratio for the mentioned years. This ratio is essential for creditors and investors as it indicates the company's capacity to fulfill its interest obligations. For a more insightful analysis of Solventum Corp.'s financial health, additional information regarding EBIT and interest expense would be required to compute the interest coverage ratio and derive meaningful conclusions.