Stryker Corporation (SYK)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.27 | 0.32 | 0.36 | 0.39 | 0.34 |
| Debt-to-capital ratio | 0.37 | 0.42 | 0.46 | 0.50 | 0.44 |
| Debt-to-equity ratio | 0.59 | 0.71 | 0.84 | 1.01 | 0.80 |
| Financial leverage ratio | 2.15 | 2.22 | 2.33 | 2.62 | 2.36 |
Stryker Corp.'s solvency ratios provide insights into the company's ability to meet its long-term financial obligations and the extent to which it relies on debt to finance its operations.
1. Debt-to-assets ratio: This ratio measures the proportion of the company's assets financed by debt. Stryker Corp.'s debt-to-assets ratio has shown a decreasing trend from 0.37 in 2019 to 0.33 in 2023. This indicates that the company has become more efficient in utilizing its assets to generate revenue and has reduced its reliance on debt financing over the years.
2. Debt-to-capital ratio: The debt-to-capital ratio reflects the percentage of the company's capital structure that is comprised of debt. Stryker Corp.'s debt-to-capital ratio has also exhibited a decreasing trend, declining from 0.46 in 2020 to 0.41 in 2023. This suggests that the company has been successful in reducing its debt levels relative to its total capital structure.
3. Debt-to-equity ratio: The debt-to-equity ratio indicates the extent to which the company's operations are funded by debt versus equity. Stryker Corp.'s debt-to-equity ratio has shown a declining pattern since 2021, dropping from 1.07 in 2020 to 0.70 in 2023. This signifies that the company has been reducing its reliance on debt financing in favor of equity funding, which can be viewed positively from a solvency perspective.
4. Financial leverage ratio: The financial leverage ratio provides insight into the company's financial risk and the proportion of assets financed by debt. Stryker Corp.'s financial leverage ratio has decreased from 2.62 in 2020 to 2.15 in 2023, indicating a reduction in the company's reliance on debt to fund its assets. This trend suggests an improvement in the company's financial stability and ability to cover its debt obligations.
Overall, the decreasing trends in Stryker Corp.'s solvency ratios reflect a positive trajectory towards improved financial health and reduced financial risk, highlighting the company's efforts to manage its debt levels effectively and strengthen its long-term financial position.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 10.92 | 8.43 | 7.67 | 7.06 | 9.45 |
As the interest coverage ratio is not provided in the table for the years 2019 to 2023, it is not possible to assess Stryker Corp.'s ability to cover its interest expenses from its operating profits. The interest coverage ratio is a key metric used to evaluate a company's ability to fulfill its interest payment obligations. A high interest coverage ratio indicates that a company is generating sufficient earnings to cover the interest costs on its debt obligations, while a low ratio may indicate potential financial distress. In the absence of this data, further insights on the company's financial health and ability to meet its debt obligations are not available.