Zimmer Biomet Holdings Inc (ZBH)

Solvency ratios

	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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Debt-to-assets ratio	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	0.27	0.26	0.28	0.34
Debt-to-capital ratio	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	0.35	0.34	0.37	0.42
Debt-to-equity ratio	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	0.54	0.53	0.58	0.72
Financial leverage ratio	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	1.99	2.01	2.08	2.11

Zimmer Biomet Holdings Inc's solvency ratios provide insight into the company's ability to meet its long-term debt obligations and the extent to which it relies on debt financing.

The debt-to-assets ratio has been relatively stable around 0.27 in the recent quarters, indicating that approximately 27% of the company's total assets are financed by debt. This suggests that Zimmer Biomet has a strong asset base to support its debt obligations.

The debt-to-capital ratio has also shown consistency, hovering around 0.32. This ratio reflects the proportion of the company's capital structure that is debt-funded, with 32% of Zimmer Biomet's capital being attributable to debt sources.

The debt-to-equity ratio has remained relatively stable in the mid to high 0.40s range, indicating that the company relies on debt for less than 50% of its equity financing. This suggests a moderate level of financial risk, as a higher ratio would indicate a higher reliance on debt financing.

The financial leverage ratio, which measures the extent to which the company uses debt to finance its operations, has also shown consistency around 1.70 to 1.80. A ratio above 1 indicates that Zimmer Biomet has more debt than equity in its capital structure, highlighting the company's leverage in generating returns for shareholders.

Overall, the solvency ratios of Zimmer Biomet Holdings Inc suggest a stable and balanced approach to debt financing, with a strong asset base supporting its debt obligations and a moderate reliance on debt to fund operations and growth initiatives.

Coverage ratios

	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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Interest coverage	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	5.01	0.04	-0.05	0.29

Interest coverage measures a company's ability to pay its interest obligations on outstanding debt. Zimmer Biomet Holdings Inc has shown consistent improvement in its interest coverage ratio over the past eight quarters. The interest coverage ratio increased from 4.95 in Q1 2022 to 7.21 in Q4 2023. This indicates that the company's earnings before interest and taxes (EBIT) are sufficient to cover its interest expenses, with a higher ratio suggesting a stronger ability to meet interest payments.

The upward trend in Zimmer Biomet's interest coverage ratio indicates improving financial health and stability. It suggests that the company is generating more income relative to its interest obligations, which can make it less risky for creditors and investors. A higher interest coverage ratio also provides the company with more financial flexibility to invest in growth opportunities, repay debt, or return value to shareholders.

Overall, Zimmer Biomet Holdings Inc's interest coverage ratio reflects a positive financial performance and prudent management of its debt obligations over the analyzed period.