Twilio Inc (TWLO)

The solvency ratios for Twilio Inc. from December 31, 2020, through December 31, 2024, indicate a consistent financial profile characterized by the absence of debt and stable leverage. Specifically, the debt-to-assets ratio, debt-to-capital ratio, and debt-to-equity ratio remain at zero throughout the period, suggesting that the company has not employed leverage or debt financing during these years. This pattern reflects a conservative financing strategy or a high level of internal funding, implying that Twilio's assets are entirely financed through equity or its own funds without reliance on external debt.

Conversely, the financial leverage ratio, which measures the company's total assets relative to shareholders' equity, shows a gradual increase from 1.12 in 2020 to 1.24 in 2024. Although this ratio remains close to 1, indicating a relatively low level of leverage, the upward trend suggests a slight increase in assets relative to equity over time. This change may be indicative of asset growth driven by internal funds rather than debt, aligning with the ratios indicating no leverage.

Overall, the data reflects a zero-debt capital structure with minimal financial risk associated with indebtedness. Twilio Inc. maintains a stable and conservative approach to solvency, with no current reliance on borrowed funds, and exhibits a modest increase in asset base relative to equity over the examined period.

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Coverage ratios

The interest coverage ratios for Twilio Inc. over the period from December 31, 2020, to December 31, 2022, indicate a consistent deficit in the company's ability to meet its interest obligations from earnings before interest and taxes (EBIT). Specifically, the ratios are reported as follows:

- December 31, 2020: -19.19
- December 31, 2021: -21.19
- December 31, 2022: -3.21

These negative figures imply that the company's EBIT was insufficient to cover interest expenses during these years, with the extent of the coverage being markedly negative. Notably, the trend suggests a significant improvement from 2021 to 2022, as the ratio moves from -21.19 to -3.21, indicating a reduced shortfall in covering interest expenses. However, despite this relative improvement, the ratio remained negative, signaling ongoing challenges in generating enough earnings to meet interest obligations without relying on external sources such as debt refinancing or equity issuance.

Data for December 31, 2023, and December 31, 2024, are not available or not reported (indicated as "\u2014"), which could suggest that either the risk measures were not calculated for these periods, the company did not conduct or report interest coverage ratios, or relevant financial data was not accessible at the time of analysis.

Overall, the sustained negative interest coverage ratios across the reported years reflect persistent difficulties in generating sufficient operating earnings to cover interest expenses, a potential concern for creditors and investors regarding the company's financial stability and risk profile.