Valaris Ltd (VAL)
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 | 1.97 | 2.17 | 2.20 | 2.46 | 2.94 |
Valaris Ltd has consistently maintained a strong solvency position as indicated by its debt-to-assets ratio, debt-to-capital ratio, and debt-to-equity ratio, all of which have remained at 0.00 over the five-year period from 2020 to 2024. This signifies that the company's level of debt in relation to its total assets, total capital, and shareholders' equity is negligible, highlighting a healthy financial structure.
Furthermore, the financial leverage ratio of Valaris Ltd has shown a declining trend from 2.94 in 2020 to 1.97 in 2024. A decreasing financial leverage ratio indicates that the company has reduced its reliance on debt financing over the years, potentially lowering its financial risk and increasing its overall stability.
Overall, based on these solvency ratios, Valaris Ltd appears to be in a robust financial position with minimal debt obligations relative to its assets, capital, and equity, coupled with a decreasing financial leverage ratio, reflecting prudent financial management and a strong solvency profile.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 5.37 | 2.22 | 5.96 | -15.82 | -16.58 |
Interest coverage ratio measures a company's ability to meet its interest payments on its outstanding debt. A higher interest coverage ratio indicates a stronger ability to cover interest expenses.
Valaris Ltd's interest coverage ratio has shown significant improvement from negative values in 2020 and 2021 to positive values in subsequent years. In 2022, the interest coverage ratio improved to 5.96, indicating the company generated enough operating income to cover its interest payments almost six times. However, in 2023, the ratio decreased to 2.22, suggesting a decline in the company's ability to cover interest expenses. Nonetheless, in 2024, the interest coverage ratio improved to 5.37, demonstrating a recovery in the company's ability to meet its interest obligations.
Overall, the trend in Valaris Ltd's interest coverage ratio shows fluctuations in the company's ability to cover interest payments over the years. It is crucial for the company to maintain a healthy interest coverage ratio to ensure it can comfortably meet its debt obligations and avoid financial distress.