Zimmer Biomet Holdings Inc (ZBH)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.23 | 0.24 | 0.23 | 0.31 | 0.27 |
| Debt-to-capital ratio | 0.28 | 0.30 | 0.30 | 0.38 | 0.35 |
| Debt-to-equity ratio | 0.39 | 0.43 | 0.43 | 0.63 | 0.54 |
| Financial leverage ratio | 1.72 | 1.75 | 1.85 | 2.00 | 1.99 |
Zimmer Biomet Holdings Inc's solvency ratios indicate the company's ability to meet its financial obligations and manage debt effectively over the past five years. The debt-to-assets ratio has been relatively stable, indicating that the company has maintained a healthy level of debt in relation to its total assets. This suggests that Zimmer Biomet has a strong asset base to support its debt obligations.
The debt-to-capital and debt-to-equity ratios have shown a decreasing trend over the years, indicating that the company has been reducing its reliance on debt to finance its operations. This is a positive sign as lower ratios suggest lower financial risk and greater financial stability. The decreasing debt-to-equity ratio specifically shows that Zimmer Biomet has been increasing its equity base relative to its debt, which signifies improved financial health.
The financial leverage ratio, which combines debt and equity to measure the company's overall financial risk, has also decreased over the years. A lower financial leverage ratio suggests that Zimmer Biomet is relying less on debt funding and is in a stronger position to weather economic downturns or industry challenges.
Overall, Zimmer Biomet Holdings Inc's solvency ratios paint a picture of a company that has been actively managing its debt and improving its financial position over the past five years. This trend reflects positively on the company's financial health and stability in the long term.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 6.54 | 4.23 | 4.13 | 0.39 | 5.01 |
Zimmer Biomet Holdings Inc's interest coverage ratio has demonstrated fluctuations over the past five years, ranging from 3.53 in 2020 to 7.44 in 2022. The interest coverage ratio measures the company's ability to cover its interest expenses with its operating income. A higher ratio indicates that the company is more capable of meeting its interest obligations.
The interest coverage ratio for Zimmer Biomet Holdings Inc has generally been above 5 in the last five years, indicating that the company has been able to comfortably cover its interest payments. The increasing trend from 2020 to 2022 suggests an improvement in the company's ability to service its debt with operating income. However, the slight decrease in 2023 from the peak in 2022 may warrant further monitoring to ensure the company's continued ability to manage its interest expenses effectively.
Overall, Zimmer Biomet Holdings Inc's interest coverage ratio indicates a relatively healthy financial position in terms of its ability to meet interest obligations, although ongoing monitoring is advisable to assess any future changes in the company's financial performance.