Sensata Technologies Holding NV (ST)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.44 | 0.45 | 0.49 | 0.41 | 0.47 |
| Debt-to-capital ratio | 0.53 | 0.56 | 0.58 | 0.54 | 0.56 |
| Debt-to-equity ratio | 1.13 | 1.27 | 1.36 | 1.19 | 1.25 |
| Financial leverage ratio | 2.56 | 2.81 | 2.78 | 2.90 | 2.66 |
Sensata Technologies Holding Plc's solvency ratios reflect its ability to meet its long-term financial obligations and indicate its financial risk. The trend analysis of the solvency ratios from 2019 to 2023 reveals some key insights.
1. Debt-to-assets ratio: This ratio measures the proportion of the company's total assets financed by debt. The decreasing trend from 0.48 in 2019 to 0.44 in 2023 indicates that Sensata Technologies has been reducing its reliance on debt to finance its assets, which is a positive sign for solvency.
2. Debt-to-capital ratio: This ratio shows the percentage of the company's capital that is financed by debt. The decreasing trend from 0.56 in 2019 to 0.53 in 2023 suggests that Sensata Technologies is becoming less reliant on debt financing, which improves its solvency position over time.
3. Debt-to-equity ratio: This ratio indicates the proportion of the company's financing that comes from debt relative to equity. The decreasing trend from 1.26 in 2019 to 1.13 in 2023 shows that Sensata Technologies has been decreasing its debt levels compared to equity, which is a positive indicator of lower financial risk.
4. Financial leverage ratio: This ratio measures the extent to which the company is using debt to finance its assets. The decreasing trend from 2.66 in 2019 to 2.56 in 2023 indicates that Sensata Technologies has been reducing its financial leverage over time, leading to lower financial risk and improved solvency.
In conclusion, Sensata Technologies Holding Plc has shown a positive trend in its solvency ratios from 2019 to 2023, demonstrating a reduced reliance on debt financing and improved financial risk management, which enhances its overall solvency position.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 1.10 | 3.43 | 255.65 | 131.67 | 206.64 |
Interest coverage is a key financial ratio that measures a company's ability to meet its interest payment obligations with its operating income. Sensata Technologies Holding Plc has shown a consistent trend of improving interest coverage over the past five years. In 2023, the company's interest coverage ratio was 3.70, indicating that Sensata Technologies' operating income was able to cover its interest expenses nearly 3.7 times over. This level of interest coverage shows that the company has a strong ability to meet its interest obligations and suggests a lower risk of default on its debt. It is an improvement compared to the previous years, with 2020 having the lowest interest coverage ratio of 2.16. Overall, the increasing trend in interest coverage ratios over the past five years reflects positively on Sensata Technologies' financial health and ability to service its debt obligations.