Zimmer Biomet Holdings Inc (ZBH)

Solvency ratios

	Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Debt-to-assets ratio	0.25	0.22	0.18	0.22	0.23	0.24	0.24	0.25	0.24	0.24	0.24	0.24	0.23	0.27	0.28	0.31	0.31	0.33	0.33	0.30
Debt-to-capital ratio	0.30	0.28	0.24	0.28	0.28	0.29	0.30	0.30	0.30	0.29	0.30	0.31	0.30	0.34	0.35	0.38	0.38	0.40	0.40	0.39
Debt-to-equity ratio	0.43	0.38	0.31	0.38	0.39	0.41	0.42	0.43	0.43	0.41	0.43	0.44	0.43	0.51	0.54	0.61	0.63	0.66	0.67	0.65
Financial leverage ratio	1.71	1.76	1.69	1.70	1.72	1.70	1.72	1.75	1.75	1.74	1.77	1.80	1.85	1.89	1.93	1.93	2.00	2.02	2.03	2.15

The solvency ratios of Zimmer Biomet Holdings Inc provide valuable insights into the company's ability to meet its long-term financial obligations.

1. Debt-to-assets ratio: This ratio indicates the proportion of the company's assets financed by debt. Zimmer Biomet's debt-to-assets ratio has been consistently low over the years, decreasing from 0.30 in March 2020 to 0.22 in December 2024. This suggests that the company has a strong asset base relative to its debt obligations.

2. Debt-to-capital ratio: The debt-to-capital ratio reflects the extent to which debt contributes to the company's capital structure. Zimmer Biomet's debt-to-capital ratio has also shown a declining trend, indicating a decreasing reliance on debt financing. The ratio decreased from 0.39 in March 2020 to 0.24 in June 2024.

3. Debt-to-equity ratio: This ratio measures the proportion of the company's financing that comes from debt compared to equity. Zimmer Biomet's debt-to-equity ratio has been decreasing consistently, signaling a reduction in financial risk. The ratio dropped from 0.65 in March 2020 to 0.31 in June 2024.

4. Financial leverage ratio: The financial leverage ratio assesses the company's ability to meet its financial commitments using debt. Zimmer Biomet's decreasing financial leverage ratio indicates a decline in the company's reliance on debt to support its operations. The ratio decreased from 2.15 in March 2020 to 1.71 in December 2024, reflecting a strengthening financial position.

Overall, the solvency ratios of Zimmer Biomet Holdings Inc depict an improving financial health and a reduced risk of default, as the company has been effectively managing its debt levels and strengthening its balance sheet over time.

Coverage ratios

	Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Interest coverage	5.90	6.06	6.09	5.97	6.35	4.63	4.73	4.80	4.23	5.02	4.72	4.06	4.13	5.35	5.58	3.74	0.39	0.04	-0.21	1.51

Zimmer Biomet Holdings Inc's interest coverage ratio has shown fluctuations over the provided periods, ranging from a low of -0.21 to a high of 6.35. The interest coverage ratio represents the company's ability to meet its interest obligations with its earnings before interest and taxes (EBIT). A ratio below 1 indicates that the company is not generating enough operating income to cover its interest expenses.

From March 31, 2020, to December 31, 2020, the interest coverage ratio remained below 1, indicating potential difficulties in meeting interest payments from operating profits. However, from March 31, 2021, onwards, the ratio improved significantly, surpassing 3.74 and reaching a peak of 6.35 by December 31, 2023.

Overall, the trend in interest coverage ratios for Zimmer Biomet Holdings Inc shows a positive improvement in the company's ability to cover interest expenses with operating income. This indicates a healthier financial position and reduced risk of default due to inadequate earnings to meet interest obligations.