West Pharmaceutical Services Inc (WST)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.02 | 0.06 | 0.06 | 0.09 | 0.11 |
| Debt-to-capital ratio | 0.02 | 0.07 | 0.08 | 0.12 | 0.14 |
| Debt-to-equity ratio | 0.03 | 0.08 | 0.09 | 0.14 | 0.16 |
| Financial leverage ratio | 1.33 | 1.35 | 1.42 | 1.51 | 1.49 |
The solvency ratios of West Pharmaceutical Services, Inc. have shown a favorable trend over the past five years.
The Debt-to-assets ratio has decreased steadily from 0.11 in 2019 to 0.05 in 2023, indicating that the company's level of debt in relation to its total assets has been decreasing, reflecting a more conservative financial structure.
Similarly, the Debt-to-capital ratio has also shown a downward trend, decreasing from 0.14 in 2019 to 0.07 in 2023. This ratio indicates the proportion of a company's capital that is financed through debt, and the downward trend suggests a reduced reliance on debt financing over the years.
The Debt-to-equity ratio has followed a similar pattern, declining from 0.16 in 2019 to 0.07 in 2023. This ratio measures the proportion of a company's equity that is financed through debt, and the decreasing trend signifies a strengthening financial position with less reliance on debt financing.
Lastly, the Financial leverage ratio has decreased from 1.49 in 2019 to 1.33 in 2023. This ratio reflects the extent to which a company is using debt to finance its operations, and the decrease over time indicates an improvement in the company's ability to meet its financial obligations.
In conclusion, the solvency ratios of West Pharmaceutical Services, Inc. indicate a healthier and more conservative financial structure, with decreasing levels of debt relative to assets, capital, equity, and leverage over the past five years.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 80.52 | 89.68 | 94.78 | 52.06 | 36.38 |
The interest coverage ratio for West Pharmaceutical Services, Inc. has shown a positive trend over the past five years. In 2019, the interest coverage ratio was 64.47, which increased to 64.29 in 2020 and further improved to 108.50 in 2021. The most recent data for 2022 indicates a significant jump to 279.11, signifying a strong ability to cover interest expenses with operating income.
Overall, the robust upward trend in the interest coverage ratio reflects the company's improving financial health and capacity to meet its interest obligations comfortably. This positive trajectory suggests that West Pharmaceutical Services, Inc. has been effectively managing its debt and generating sufficient earnings to cover its interest expenses.