Solventum Corp. (SOLV)
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 | |
|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 4.89 | 4.62 | 5.08 | 3.82 | 4.22 | 4.27 | 3.61 | 1.16 | 1.16 |
Solventum Corp. has consistently maintained a strong solvency position over the analyzed periods, as indicated by its low debt-to-assets, debt-to-capital, and debt-to-equity ratios, all of which remained at 0.00 across all reporting dates. This suggests that the company relies minimally on external financing to fund its operations and investments, thereby reducing its financial risk.
However, the financial leverage ratio, which measures the extent to which a company is using debt to finance its assets, shows some fluctuations over the periods. The ratio increased from 1.16 on December 31, 2022, to a peak of 5.08 on June 30, 2024, before slightly decreasing to 4.89 on December 31, 2024. These fluctuations could indicate changes in the company's capital structure and leverage levels.
Overall, Solventum Corp.'s solvency ratios suggest a prudent financial management strategy with a low dependency on debt financing, although the fluctuations in the financial leverage ratio should be monitored for potential impacts on the company's long-term financial stability.
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 | |
|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 2.45 | 4.80 | 8.94 | 39.51 | — | — | — | — | — |
Based on the provided data, Solventum Corp.'s interest coverage ratio has shown a significant decline over the last few quarters. The interest coverage ratio was not available for the periods ending December 31, 2022 to September 30, 2023 (indicated by "N/A"), suggesting potential issues with servicing its interest payments during these periods.
The interest coverage ratio improved to 39.51 for the quarter ending March 31, 2024, indicating that the company's operating profits were sufficient to cover its interest expenses approximately 39 times. However, this improvement was short-lived as the ratio decreased to 8.94 for the quarter ending June 30, 2024, and further dropped to 4.80 for the quarter ending September 30, 2024.
The most recent data as of December 31, 2024, shows a considerable decline in the interest coverage ratio to 2.45, indicating that Solventum Corp.'s ability to cover its interest expenses with operating income has weakened significantly. This downward trend in the interest coverage ratio raises concerns about the company's financial stability and its ability to meet its debt obligations comfortably.
Overall, Solventum Corp.'s interest coverage ratio has experienced fluctuations, and the downward trend in recent quarters suggests a potential strain on the company's ability to pay interest costs from its operational earnings. Further analysis of the company's financial health and debt repayment capacity may be warranted to assess its long-term sustainability.