TE Connectivity Ltd (TEL)

TE Connectivity Ltd's solvency ratios provide insights into the company's ability to meet its financial obligations and manage its debt levels effectively.

The debt-to-assets ratio has remained relatively stable over the past five years, indicating that the company has maintained a consistent level of debt relative to its assets. This ratio stood at 0.16 as of September 30, 2023, suggesting that 16% of the company's assets are financed by debt.

Similarly, the debt-to-capital ratio has also shown consistency over the years, hovering around 0.23 to 0.25. This ratio indicates that around 23% to 25% of the company's capital structure is comprised of debt.

The debt-to-equity ratio has fluctuated slightly but has generally been within a narrow range, ranging from 0.30 to 0.36. As of September 30, 2023, the ratio stood at 0.31, suggesting that the company has funded around 31% of its assets through debt, relative to shareholders' equity.

The financial leverage ratio, which reflects the proportion of a company's assets that are financed by debt, has also shown stability over the years, ranging from 1.86 to 2.03. As of September 30, 2023, the financial leverage ratio was 1.88, indicating that the company's assets are financed nearly twice as much by debt as by equity.

Overall, TE Connectivity Ltd's solvency ratios demonstrate a consistent and manageable level of debt relative to its assets, capital, and equity. This suggests that the company has a sound financial structure and is capable of meeting its debt obligations effectively.

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Coverage ratios

TE Connectivity Ltd's interest coverage ratio has shown fluctuations over the past five years. The interest coverage ratio measures the company's ability to pay interest expenses on its outstanding debt with its operating income. A higher ratio indicates a stronger ability to cover interest payments.

In 2023, the interest coverage ratio stands at 29.42, demonstrating a decrease from the previous year's ratio of 42.42. Despite the decrease, TE Connectivity Ltd still has a robust ability to cover its interest expenses with its operating income.

Looking back at the trend, the interest coverage ratio has generally been healthy over the past five years, ranging from 12.29 in 2020 to a high of 43.57 in 2021. This indicates the company's consistent capacity to meet its interest obligations and suggests financial stability.

Overall, while there has been some variability in TE Connectivity Ltd's interest coverage ratio, the company has maintained a solid ability to service its debt with its operating income over the years. It will be important to monitor future financial performance to ensure that the trend remains favorable.