Varex Imaging Corp (VREX)

Based on the solvency ratios of Varex Imaging Corp over the past five years, we can observe the following trends:

1. Debt-to-assets ratio: This ratio has remained relatively stable over the past five years, ranging between 0.35 and 0.40. It indicates that, on average, 35% to 40% of the company's assets are financed by debt.

2. Debt-to-capital ratio: Similar to the debt-to-assets ratio, the debt-to-capital ratio has also shown consistency over the years, hovering around 0.44 to 0.50. This suggests that around 44% to 50% of the company's capital structure is in the form of debt.

3. Debt-to-equity ratio: The debt-to-equity ratio has fluctuated between 0.77 and 1.00 over the five-year period. This ratio indicates the proportion of debt relative to equity in the company's capital structure. A higher ratio, such as seen in 2020 and 2021, may point to increased financial risk due to higher debt levels compared to equity.

4. Financial leverage ratio: The financial leverage ratio has shown a similar pattern to the debt-to-equity ratio, ranging between 2.20 and 2.52. This ratio measures the extent to which a company is using debt to fund its operations. An increasing trend in this ratio, as observed in earlier years, can indicate higher financial risk and reliance on debt financing.

In summary, Varex Imaging Corp has maintained relatively stable solvency ratios over the past five years, with moderate levels of debt relative to assets, capital, and equity. However, the company experienced a spike in leverage in 2020 and 2021, which may have increased its financial risk during those periods. It would be essential for investors and stakeholders to monitor these ratios for any signs of deterioration in the company's financial health.

---

Coverage ratios

The interest coverage ratio of Varex Imaging Corp has shown some fluctuations over the past five years. In 2023, the interest coverage ratio was 2.05, indicating that the company generated operating income that was more than twice the amount needed to cover its interest expenses. This suggests the company has a comfortable buffer to meet its interest obligations.

In 2022 and 2019, the interest coverage ratios were also above 2, reflecting a similar trend of having ample operating income to cover interest payments. However, in 2021, the ratio dropped to 1.67, although still indicating the company had sufficient operating income to cover its interest expenses adequately.

The most concerning year was 2020, where the interest coverage ratio was -1.33, implying that the company's operating income was insufficient to cover its interest costs. This could signify financial distress and a potential inability to meet debt obligations solely from operating activities.

Overall, although there have been some fluctuations, Varex Imaging Corp generally maintained a healthy interest coverage ratio over the period, except for 2020. Investors and stakeholders should monitor the trend in the interest coverage ratio to assess the company's ability to service its debt in the future.