Zimmer Biomet Holdings Inc (ZBH)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.25 | 0.23 | 0.24 | 0.23 | 0.31 |
| Debt-to-capital ratio | 0.30 | 0.28 | 0.30 | 0.30 | 0.38 |
| Debt-to-equity ratio | 0.43 | 0.39 | 0.43 | 0.43 | 0.63 |
| Financial leverage ratio | 1.71 | 1.72 | 1.75 | 1.85 | 2.00 |
Zimmer Biomet Holdings Inc's solvency ratios indicate the company's ability to meet its long-term financial obligations. The Debt-to-assets ratio, which measures the proportion of total debt to total assets, has been decreasing from 0.31 in 2020 to 0.25 in 2024. This trend signifies a lower reliance on debt to finance its assets over the years.
Similarly, the Debt-to-capital ratio, which shows the percentage of total capitalization that is attributed to debt, has also decreased from 0.38 in 2020 to 0.30 in 2024. This reduction suggests a more balanced capital structure with less dependency on borrowed funds.
The Debt-to-equity ratio, demonstrating the proportion of debt relative to shareholders' equity, has fluctuated but generally decreased from 0.63 in 2020 to 0.43 in 2024. This indicates a decreasing financial leverage on equity holders and a potential improvement in the company's financial risk profile.
Lastly, the Financial leverage ratio, which indicates the company's asset base relative to its debt level, has shown a declining trend from 2.00 in 2020 to 1.71 in 2024. This reduction suggests that the company is becoming less reliant on debt financing and is managing its financial leverage effectively over the years.
Overall, Zimmer Biomet Holdings Inc's solvency ratios reflect a positive trend towards a stronger financial position with reduced reliance on debt financing, improved capital structure, and effective management of financial leverage.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 5.90 | 6.35 | 4.23 | 4.13 | 0.39 |
The interest coverage ratio for Zimmer Biomet Holdings Inc has shown significant improvement over the years. Starting at a concerning level of 0.39 on December 31, 2020, the company managed to enhance its ability to cover interest expenses substantially. By the end of December 2024, the interest coverage ratio reached a healthier level of 5.90, indicating that Zimmer Biomet Holdings Inc is generating sufficient earnings to cover its interest obligations more than adequately. This trend suggests that the company has become more financially stable and capable of servicing its debt obligations comfortably. Overall, the increasing interest coverage ratio reflects positive financial health and a reduced risk of potential financial distress for Zimmer Biomet Holdings Inc.