Waters Corporation (WAT)

The solvency ratios of Waters Corp. indicate the company's ability to meet its long-term financial obligations and manage its debt levels effectively.

1. Debt-to-assets ratio: This ratio has shown a fluctuating trend over the past five years, ranging from 0.48 to 0.66. The ratio stood at 0.51 as of Dec 31, 2023, indicating that 51% of the company's assets are funded by debt. The slight increase in 2023 compared to the previous year may suggest a higher reliance on debt financing to support the company's asset base.

2. Debt-to-capital ratio: Waters Corp.'s debt-to-capital ratio has also displayed variability, with values ranging from 0.67 to 1.15 over the last five years. As of Dec 31, 2023, the ratio decreased to 0.67, indicating that 67% of the company's capital is financed through debt. This decrease may signify improved capital structure efficiency and reduced financial risk.

3. Debt-to-equity ratio: The trend in this ratio demonstrates a significant decline from 2019 to 2023, with the ratio falling from 5.84 to 2.05. The ratio as of Dec 31, 2023, signifies that the company's debt is more than twice its equity. This reduction in the ratio reflects a decreasing reliance on debt financing and an improvement in the company's financial leverage.

4. Financial leverage ratio: Waters Corp.'s financial leverage ratio has also decreased notably over the past five years, dropping from 12.23 to 4.02 as of Dec 31, 2023. This decline indicates a reduction in the company's financial risk and leverage levels, which could lead to a more stable financial position and improved solvency.

In summary, the solvency ratios of Waters Corp. demonstrate a mixed trend, with fluctuations in debt-to-assets and debt-to-capital ratios, but significant improvements in debt-to-equity and financial leverage ratios. The company appears to have managed its debt levels effectively, reducing financial risk and enhancing its solvency position.

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Coverage ratios

The interest coverage ratio of Waters Corp. has shown fluctuations over the past five years. The ratio decreased from 26.60 in 2019 to 9.94 in 2023, indicating a significant decline in the company's ability to cover its interest expenses with its operating income in the most recent year. This downward trend suggests that Waters Corp. may have experienced challenges in generating sufficient income to meet its interest obligations.

It is worth noting that the interest coverage ratio improved in 2022 and 2021, reaching values of 23.38 and 25.27, respectively. These higher ratios indicate that Waters Corp. had a strong ability to cover its interest expenses with its operating income during those years, reflecting a healthier financial position.

Overall, although Waters Corp. has experienced fluctuations in its interest coverage ratio in recent years, the company has historically demonstrated a solid ability to meet its interest obligations. However, the significant decrease in the interest coverage ratio in 2023 raises some concerns about the company's financial performance and its ability to service its debt effectively.