Tandem Diabetes Care Inc (TNDM)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 3.68 | 3.04 | 2.39 | 2.09 | 1.96 |
Tandem Diabetes Care Inc has consistently maintained a strong solvency position, as indicated by the data provided for key solvency ratios. The Debt-to-assets ratio, Debt-to-capital ratio, and Debt-to-equity ratio have remained at 0.00 across all the years from 2020 to 2024. This signifies that the company has effectively managed its debt levels in relation to its total assets, capital, and equity, reflecting a low level of financial risk.
However, it is important to note that the Financial leverage ratio has shown an increasing trend over the years, rising from 1.96 in 2020 to 3.68 in 2024. This ratio indicates the extent to which the company is using debt to finance its operations compared to equity. The increasing trend suggests that Tandem Diabetes Care Inc has been relying more on debt financing over the years, which could potentially increase financial risk and interest expenses.
Overall, while the company's debt-related ratios reflect a strong solvency position with minimal reliance on debt, the increasing Financial leverage ratio warrants further monitoring to ensure sustainable financial health in the long term.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | -18.02 | -21.29 | -20.09 | 5.25 | -0.65 |
The interest coverage ratio is a key metric used to evaluate a company's ability to meet its interest payment obligations. It is calculated by dividing a company's earnings before interest and taxes (EBIT) by its interest expense. A ratio above 1 indicates that the company generates enough earnings to cover its interest payments.
In the case of Tandem Diabetes Care Inc, the interest coverage ratio has fluctuated significantly over the past few years. As of December 31, 2020, the company had a negative interest coverage ratio of -0.65, indicating that its earnings were insufficient to cover its interest expenses. This raises concerns about the company's financial health and ability to service its debt obligations.
However, there has been a positive turnaround in the interest coverage ratio in the following years. By December 31, 2021, the ratio improved to 5.25, showing a significant recovery in the company's ability to cover its interest payments. This positive trend continued into December 31, 2022, with a further improvement in the ratio to -20.09.
Subsequently, the interest coverage ratio deteriorated significantly in the subsequent years, with ratios of -21.29 and -18.02 as of December 31, 2023 and December 31, 2024 respectively. These negative ratios suggest that the company's earnings were insufficient to cover its interest expenses, indicating potential financial distress.
Overall, the fluctuation in Tandem Diabetes Care Inc's interest coverage ratio highlights the company's varying ability to meet its interest payment obligations over the years. Investors and stakeholders should closely monitor this ratio to assess the company's financial stability and debt servicing capacity.