Waters Corporation (WAT)

Waters Corporation's solvency ratios provide insight into the company's ability to meet its long-term financial obligations. Over the five-year period from 2020 to 2024, the Debt-to-assets ratio has shown some fluctuation, starting at 0.42 in 2020 and peaking at 0.50 in 2023 before decreasing to 0.36 in 2024. This ratio indicates the proportion of the company's assets financed by debt.

The Debt-to-capital ratio has displayed a decreasing trend, declining from 0.84 in 2020 to 0.47 in 2024. This ratio reflects the proportion of the company's capital structure that is financed by debt, indicating Waters Corporation's reliance on debt financing over the years.

The Debt-to-equity ratio has demonstrated a significant decline from 5.20 in 2020 to 0.89 in 2024. This ratio portrays the extent to which the company's operations are funded by debt relative to equity, with a lower ratio suggesting a stronger financial position in terms of solvency.

The Financial leverage ratio has also shown a substantial decrease from 12.23 in 2020 to 2.49 in 2024. This ratio measures the company's financial risk by comparing its equity to total assets. A lower financial leverage ratio indicates a lower level of financial risk and higher solvency.

Overall, the decreasing trends in the Debt-to-capital, Debt-to-equity, and Financial leverage ratios over the five-year period reflect Waters Corporation's improving solvency position and reduced reliance on debt financing for its operations. However, the slight fluctuations in the Debt-to-assets ratio suggest varying levels of asset financing through debt during the same period.

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Coverage ratios

The interest coverage ratio for Waters Corporation has shown varying trends over the last five years. In December 2020, the ratio stood at 13.15, indicating the company's ability to cover its interest expenses 13.15 times over with its operating income.

There was a notable increase in the interest coverage ratio to 18.29 by December 2021, signaling an improvement in the company's ability to meet its interest obligations comfortably. This positive trend continued in December 2022, with the ratio further improving to 17.90, suggesting a strong financial position.

However, a significant drop in the interest coverage ratio was observed in December 2023, falling to 8.27. This decline may raise concerns about the company's ability to cover its interest expenses adequately with its current level of operating income.

In December 2024, the interest coverage ratio improved slightly to 9.42. Despite this improvement, it remains lower than the levels observed in the previous years, indicating the need for further monitoring of the company's financial health and ability to service its debt obligations.