TE Connectivity Ltd (TEL)
Solvency ratios
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.15 | 0.16 | 0.16 | 0.17 | 0.18 |
| Debt-to-capital ratio | 0.21 | 0.23 | 0.23 | 0.25 | 0.27 |
| Debt-to-equity ratio | 0.27 | 0.31 | 0.30 | 0.33 | 0.36 |
| Financial leverage ratio | 1.83 | 1.88 | 1.91 | 2.00 | 2.03 |
TE Connectivity Ltd's solvency ratios indicate the company's ability to meet its financial obligations in the long term. Over the past five years, there has been a general trend of improvement in the company's solvency position.
The debt-to-assets ratio has decreased from 0.18 in 2020 to 0.15 in 2024, indicating that the company has reduced its reliance on debt to finance its assets. This implies a stronger asset base relative to its debt obligations.
Similarly, the debt-to-capital ratio and debt-to-equity ratio have shown a declining trend, moving from 0.27 to 0.21 and from 0.36 to 0.27, respectively, over the same period. This suggests that TE Connectivity Ltd has decreased its leverage and is relying more on equity financing, which may lead to lower financial risk.
The financial leverage ratio has also improved, decreasing from 2.03 in 2020 to 1.83 in 2024. This indicates that the company's reliance on borrowed funds has decreased, resulting in a more stable capital structure.
Overall, the declining trend in TE Connectivity Ltd's solvency ratios suggests an improving financial health and lower risk of default. However, it is important to consider other factors such as the company's profitability and cash flow position to get a comprehensive view of its overall financial stability.
Coverage ratios
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 39.94 | 29.42 | 42.42 | 43.57 | 12.29 |
TE Connectivity Ltd's interest coverage has shown a strong and consistent performance over the past five years. The company's interest coverage ratio has ranged from 12.29 to 43.57 during this period, indicating its ability to meet its interest obligations with ease. In particular, the interest coverage ratio peaked at 43.57 in 2021, reflecting a significant improvement in the company's ability to cover its interest expenses.
The consistent high values of the interest coverage ratio demonstrate TE Connectivity Ltd's robust financial position and its ability to generate sufficient operating income to cover its interest expenses. This suggests that the company has a strong ability to service its debt obligations and is not overly burdened by interest expenses. Additionally, the increasing trend in the interest coverage ratio from 2020 to 2021 and the subsequent fluctuations in the following years suggest that the company has managed its debt servicing capabilities effectively.
Overall, TE Connectivity Ltd's interest coverage ratio indicates a healthy financial position and ability to manage its debt obligations comfortably.