Analysis of Solvency Ratios
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
Debt Ratios
Coverage Ratios
Enphase Energy Inc., solvency ratios
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
An analysis of solvency ratios from 2019 to 2023 reveals a distinct cyclical pattern of capital expansion followed by a period of deleveraging and significantly improved creditworthiness.
- Leverage and Capital Structure
- A significant increase in leverage is observed peaking in 2021, where the debt-to-equity ratio reached 2.41 and the debt-to-assets ratio climbed to 0.50. This peak reflects a period of heightened financial risk relative to previous years. However, a consistent downward trend followed in 2022 and 2023, with the debt-to-equity ratio moderating to 1.32 and the debt-to-assets ratio decreasing to 0.38, signaling a strategic reduction in the reliance on debt financing.
- Financial Leverage and Capitalization
- Financial leverage followed a trajectory similar to the debt ratios, peaking at 4.83 in 2021 before declining to 3.44 by the end of 2023. Debt to capital ratios similarly peaked at 0.71 in 2021 and contracted to 0.57 by 2023. The impact of operating lease liabilities on these metrics is minimal, as the ratios including lease obligations closely track the standard debt metrics across all observed periods.
- Coverage Ratios and Solvency Strength
- A stark contrast is noted in coverage ratios. Interest coverage and fixed charge coverage ratios reached their lowest points in 2021, at 3.68 and 3.32 respectively, coinciding with the peak in leverage. Subsequently, a substantial expansion in coverage occurred; the interest coverage ratio surged to 48.90 in 2022 and further to 59.05 in 2023. This indicates a dramatic improvement in the ability to service interest payments and meet fixed obligations, suggesting a significant increase in earnings relative to fixed costs.
The overall solvency profile indicates that while 2021 represented a period of maximum financial risk, the subsequent two years have been characterized by a measured reduction in leverage and an exponential increase in the capacity to cover financial obligations.
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Debt to Equity
Enphase Energy Inc., debt to equity calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Debt, current | —) | 90,892) | 86,052) | 325,967) | 2,884) | |
| Debt, non-current | 1,293,738) | 1,199,465) | 951,594) | 4,898) | 102,659) | |
| Total debt | 1,293,738) | 1,290,357) | 1,037,646) | 330,865) | 105,543) | |
| Stockholders’ equity | 983,624) | 825,573) | 430,168) | 483,993) | 272,212) | |
| Solvency Ratio | ||||||
| Debt to equity1 | 1.32 | 1.56 | 2.41 | 0.68 | 0.39 | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| Advanced Micro Devices Inc. | 0.04 | 0.05 | 0.04 | — | — | |
| Analog Devices Inc. | 0.20 | 0.18 | 0.18 | 0.43 | — | |
| Applied Materials Inc. | 0.35 | 0.45 | 0.45 | 0.52 | — | |
| Broadcom Inc. | 1.64 | 1.74 | 1.59 | 1.72 | — | |
| Intel Corp. | 0.47 | 0.41 | 0.40 | — | — | |
| KLA Corp. | 2.02 | 4.75 | 1.02 | — | — | |
| Lam Research Corp. | 0.61 | 0.80 | 0.83 | — | — | |
| Marvell Technology Inc. | 0.29 | 0.29 | 0.14 | — | — | |
| Micron Technology Inc. | 0.30 | 0.14 | 0.15 | — | — | |
| NVIDIA Corp. | 0.50 | 0.41 | 0.41 | — | — | |
| Qualcomm Inc. | 0.71 | 0.86 | 1.58 | 2.59 | — | |
| Texas Instruments Inc. | 0.66 | 0.60 | 0.58 | — | — | |
| Debt to Equity, Sector | ||||||
| Semiconductors & Semiconductor Equipment | 0.46 | 0.43 | 0.49 | — | — | |
| Debt to Equity, Industry | ||||||
| Information Technology | 0.66 | 0.70 | 0.83 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Debt to equity = Total debt ÷ Stockholders’ equity
= 1,293,738 ÷ 983,624 = 1.32
2 Click competitor name to see calculations.
The solvency profile exhibits a period of significant leverage expansion followed by a trend toward stabilization and gradual deleveraging. Between 2019 and 2023, total debt increased substantially, while stockholders' equity grew more steadily, resulting in a volatile debt-to-equity trajectory that peaked in 2021.
- Total Debt Trends
- A sharp upward trajectory in total obligations is observed between 2019 and 2022. Debt levels rose from 105,543 thousand in 2019 to 1,293,738 thousand by 2023. The most aggressive increase occurred between 2020 and 2021, where debt more than tripled, indicating a period of intense capital acquisition. By 2023, debt levels plateaued, showing negligible growth compared to the preceding years.
- Stockholders' Equity Growth
- Equity demonstrated a general upward trend, increasing from 272,212 thousand in 2019 to 983,624 thousand in 2023. Despite a slight contraction observed in 2021, a robust recovery occurred in 2022 and 2023, which significantly strengthened the capital base and provided a buffer against the increased debt load.
- Debt to Equity Ratio Analysis
- The debt-to-equity ratio rose from 0.39 in 2019 to a peak of 2.41 in 2021, reflecting a phase where debt accumulation significantly outpaced equity growth. A corrective trend followed in 2022 and 2023, with the ratio decreasing to 1.56 and 1.32, respectively. This downward movement in the latter two years suggests an improvement in solvency and a reduction in financial risk relative to the 2021 peak.
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Debt to Equity (including Operating Lease Liability)
Enphase Energy Inc., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Debt, current | —) | 90,892) | 86,052) | 325,967) | 2,884) | |
| Debt, non-current | 1,293,738) | 1,199,465) | 951,594) | 4,898) | 102,659) | |
| Total debt | 1,293,738) | 1,290,357) | 1,037,646) | 330,865) | 105,543) | |
| Operating lease liabilities, current | 5,220) | 5,371) | 3,830) | 4,542) | 3,170) | |
| Operating lease liabilities, non-current (Other liabilities) | 18,802) | 19,077) | 11,920) | 15,209) | 9,542) | |
| Total debt (including operating lease liability) | 1,317,760) | 1,314,805) | 1,053,396) | 350,616) | 118,255) | |
| Stockholders’ equity | 983,624) | 825,573) | 430,168) | 483,993) | 272,212) | |
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | 1.34 | 1.59 | 2.45 | 0.72 | 0.43 | |
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| Advanced Micro Devices Inc. | 0.06 | 0.05 | 0.10 | — | — | |
| Analog Devices Inc. | 0.21 | 0.19 | 0.19 | 0.46 | — | |
| Applied Materials Inc. | 0.37 | 0.48 | 0.47 | 0.54 | — | |
| Broadcom Inc. | 1.65 | 1.76 | 1.61 | 1.75 | — | |
| Intel Corp. | 0.47 | 0.42 | 0.40 | — | — | |
| KLA Corp. | 2.08 | 4.83 | 1.05 | — | — | |
| Lam Research Corp. | 0.64 | 0.83 | 0.86 | — | — | |
| Marvell Technology Inc. | 0.30 | 0.30 | 0.16 | — | — | |
| NVIDIA Corp. | 0.54 | 0.44 | 0.46 | — | — | |
| Qualcomm Inc. | 0.74 | 0.90 | 1.64 | 2.67 | — | |
| Texas Instruments Inc. | 0.70 | 0.63 | 0.62 | — | — | |
| Debt to Equity (including Operating Lease Liability), Sector | ||||||
| Semiconductors & Semiconductor Equipment | 0.47 | 0.44 | 0.51 | — | — | |
| Debt to Equity (including Operating Lease Liability), Industry | ||||||
| Information Technology | 0.72 | 0.76 | 0.90 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Stockholders’ equity
= 1,317,760 ÷ 983,624 = 1.34
2 Click competitor name to see calculations.
The solvency profile of the entity underwent significant volatility between 2019 and 2023, characterized by a period of rapid debt accumulation followed by a phase of equity-driven deleveraging.
- Total Debt Trends
- Total debt, including operating lease liabilities, exhibited a steep upward trajectory from 2019 to 2022. The balance rose from US$118.26 million in 2019 to US$1.31 billion by the end of 2022. This growth slowed significantly in 2023, with the balance remaining nearly flat at US$1.32 billion.
- Stockholders' Equity Evolution
- Equity demonstrated a general upward trend, increasing from US$272.21 million in 2019 to US$983.62 million in 2023. A temporary contraction was noted in 2021, where equity declined to US$430.17 million, prior to a substantial recovery in the subsequent two fiscal years.
- Debt to Equity Ratio Analysis
- The debt to equity ratio experienced a sharp increase from 0.43 in 2019 to a peak of 2.45 in 2021. This peak was the result of simultaneous debt expansion and a decrease in equity. Following 2021, a corrective trend emerged, with the ratio descending to 1.59 in 2022 and further to 1.34 in 2023. This indicates a gradual improvement in the solvency position as the growth in equity began to offset the impact of the accumulated debt.
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Debt to Capital
Enphase Energy Inc., debt to capital calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Debt, current | —) | 90,892) | 86,052) | 325,967) | 2,884) | |
| Debt, non-current | 1,293,738) | 1,199,465) | 951,594) | 4,898) | 102,659) | |
| Total debt | 1,293,738) | 1,290,357) | 1,037,646) | 330,865) | 105,543) | |
| Stockholders’ equity | 983,624) | 825,573) | 430,168) | 483,993) | 272,212) | |
| Total capital | 2,277,362) | 2,115,930) | 1,467,814) | 814,858) | 377,755) | |
| Solvency Ratio | ||||||
| Debt to capital1 | 0.57 | 0.61 | 0.71 | 0.41 | 0.28 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| Advanced Micro Devices Inc. | 0.04 | 0.04 | 0.04 | — | — | |
| Analog Devices Inc. | 0.16 | 0.15 | 0.15 | 0.30 | — | |
| Applied Materials Inc. | 0.26 | 0.31 | 0.31 | 0.34 | — | |
| Broadcom Inc. | 0.62 | 0.64 | 0.61 | 0.63 | — | |
| Intel Corp. | 0.32 | 0.29 | 0.29 | — | — | |
| KLA Corp. | 0.67 | 0.83 | 0.50 | — | — | |
| Lam Research Corp. | 0.38 | 0.44 | 0.45 | — | — | |
| Marvell Technology Inc. | 0.22 | 0.22 | 0.12 | — | — | |
| Micron Technology Inc. | 0.23 | 0.12 | 0.13 | — | — | |
| NVIDIA Corp. | 0.33 | 0.29 | 0.29 | — | — | |
| Qualcomm Inc. | 0.42 | 0.46 | 0.61 | 0.72 | — | |
| Texas Instruments Inc. | 0.40 | 0.37 | 0.37 | — | — | |
| Debt to Capital, Sector | ||||||
| Semiconductors & Semiconductor Equipment | 0.32 | 0.30 | 0.33 | — | — | |
| Debt to Capital, Industry | ||||||
| Information Technology | 0.40 | 0.41 | 0.45 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Debt to capital = Total debt ÷ Total capital
= 1,293,738 ÷ 2,277,362 = 0.57
2 Click competitor name to see calculations.
Between 2019 and 2023, a significant expansion in the financial structure was observed, characterized by a substantial increase in both total debt and total capital. While the company aggressively increased its leverage in the early part of the period to fund growth, the most recent trends indicate a stabilization of debt obligations and a gradual improvement in the solvency profile.
- Total Debt Accumulation
- Total debt experienced rapid growth, rising from 105,543 thousand US dollars in 2019 to 1,293,738 thousand US dollars by December 31, 2023. The most pronounced increase occurred between 2020 and 2021, where debt levels more than tripled. However, this growth plateaued between 2022 and 2023, suggesting a transition from an aggressive borrowing phase to a maintenance phase.
- Total Capital Growth
- Total capital demonstrated consistent upward momentum throughout the five-year period, increasing from 377,755 thousand US dollars in 2019 to 2,277,362 thousand US dollars in 2023. The steady growth in the capital base provided the necessary foundation to support the increased debt load while maintaining operational scalability.
- Debt to Capital Ratio Dynamics
- The debt to capital ratio reflects a peaking and subsequent correction pattern. The ratio rose from 0.28 in 2019 to a peak of 0.71 in 2021, indicating that debt became the primary driver of capital expansion during that timeframe. Following the 2021 peak, the ratio declined to 0.61 in 2022 and further to 0.57 in 2023. This downward trend suggests a strategic deleveraging process or a higher proportion of equity growth relative to new debt issuance, resulting in a strengthened solvency position.
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Debt to Capital (including Operating Lease Liability)
Enphase Energy Inc., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Debt, current | —) | 90,892) | 86,052) | 325,967) | 2,884) | |
| Debt, non-current | 1,293,738) | 1,199,465) | 951,594) | 4,898) | 102,659) | |
| Total debt | 1,293,738) | 1,290,357) | 1,037,646) | 330,865) | 105,543) | |
| Operating lease liabilities, current | 5,220) | 5,371) | 3,830) | 4,542) | 3,170) | |
| Operating lease liabilities, non-current (Other liabilities) | 18,802) | 19,077) | 11,920) | 15,209) | 9,542) | |
| Total debt (including operating lease liability) | 1,317,760) | 1,314,805) | 1,053,396) | 350,616) | 118,255) | |
| Stockholders’ equity | 983,624) | 825,573) | 430,168) | 483,993) | 272,212) | |
| Total capital (including operating lease liability) | 2,301,384) | 2,140,378) | 1,483,564) | 834,609) | 390,467) | |
| Solvency Ratio | ||||||
| Debt to capital (including operating lease liability)1 | 0.57 | 0.61 | 0.71 | 0.42 | 0.30 | |
| Benchmarks | ||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||
| Advanced Micro Devices Inc. | 0.05 | 0.05 | 0.09 | — | — | |
| Analog Devices Inc. | 0.17 | 0.16 | 0.16 | 0.31 | — | |
| Applied Materials Inc. | 0.27 | 0.32 | 0.32 | 0.35 | — | |
| Broadcom Inc. | 0.62 | 0.64 | 0.62 | 0.64 | — | |
| Intel Corp. | 0.32 | 0.30 | 0.29 | — | — | |
| KLA Corp. | 0.67 | 0.83 | 0.51 | — | — | |
| Lam Research Corp. | 0.39 | 0.45 | 0.46 | — | — | |
| Marvell Technology Inc. | 0.23 | 0.23 | 0.14 | — | — | |
| NVIDIA Corp. | 0.35 | 0.31 | 0.31 | — | — | |
| Qualcomm Inc. | 0.43 | 0.47 | 0.62 | 0.73 | — | |
| Texas Instruments Inc. | 0.41 | 0.39 | 0.38 | — | — | |
| Debt to Capital (including Operating Lease Liability), Sector | ||||||
| Semiconductors & Semiconductor Equipment | 0.32 | 0.31 | 0.34 | — | — | |
| Debt to Capital (including Operating Lease Liability), Industry | ||||||
| Information Technology | 0.42 | 0.43 | 0.47 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 1,317,760 ÷ 2,301,384 = 0.57
2 Click competitor name to see calculations.
The solvency profile exhibits a period of rapid expansion in total debt followed by stabilization and a subsequent reduction in the debt-to-capital ratio. While total debt increased significantly between 2019 and 2022, the growth in total capital eventually outpaced the accumulation of debt, resulting in a strengthened solvency position by the end of 2023.
- Total Debt Trends
- A substantial increase in total debt, including operating lease liabilities, is observed from 2019 (US$ 118,255 thousand) to 2022 (US$ 1,314,805 thousand). This trajectory indicates a phase of aggressive funding. However, the growth rate plateaued in 2023, with the total debt figure remaining nearly stagnant at US$ 1,317,760 thousand.
- Total Capital Expansion
- Total capital has demonstrated consistent year-over-year growth, rising from US$ 390,467 thousand in 2019 to US$ 2,301,384 thousand in 2023. This steady upward trend suggests a broadening of the financial base, reflecting an increase in total resources available to the entity.
- Debt to Capital Ratio Analysis
- The debt to capital ratio climbed from 0.30 in 2019 to a peak of 0.71 in 2021, signifying a period of increased financial leverage. Following this peak, a downward trend emerged, with the ratio decreasing to 0.61 in 2022 and further to 0.57 in 2023. This decline indicates that the growth in total capital has exceeded the growth in debt over the final two years of the period, effectively reducing the proportion of debt within the capital structure.
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Debt to Assets
Enphase Energy Inc., debt to assets calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Debt, current | —) | 90,892) | 86,052) | 325,967) | 2,884) | |
| Debt, non-current | 1,293,738) | 1,199,465) | 951,594) | 4,898) | 102,659) | |
| Total debt | 1,293,738) | 1,290,357) | 1,037,646) | 330,865) | 105,543) | |
| Total assets | 3,383,012) | 3,084,280) | 2,079,256) | 1,200,102) | 713,223) | |
| Solvency Ratio | ||||||
| Debt to assets1 | 0.38 | 0.42 | 0.50 | 0.28 | 0.15 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| Advanced Micro Devices Inc. | 0.04 | 0.04 | 0.03 | — | — | |
| Analog Devices Inc. | 0.14 | 0.13 | 0.13 | 0.24 | — | |
| Applied Materials Inc. | 0.18 | 0.20 | 0.21 | 0.24 | — | |
| Broadcom Inc. | 0.54 | 0.54 | 0.53 | 0.54 | — | |
| Intel Corp. | 0.26 | 0.23 | 0.23 | — | — | |
| KLA Corp. | 0.42 | 0.53 | 0.34 | — | — | |
| Lam Research Corp. | 0.27 | 0.29 | 0.31 | — | — | |
| Marvell Technology Inc. | 0.20 | 0.21 | 0.11 | — | — | |
| Micron Technology Inc. | 0.21 | 0.10 | 0.12 | — | — | |
| NVIDIA Corp. | 0.27 | 0.25 | 0.24 | — | — | |
| Qualcomm Inc. | 0.30 | 0.32 | 0.38 | 0.44 | — | |
| Texas Instruments Inc. | 0.35 | 0.32 | 0.31 | — | — | |
| Debt to Assets, Sector | ||||||
| Semiconductors & Semiconductor Equipment | 0.26 | 0.24 | 0.26 | — | — | |
| Debt to Assets, Industry | ||||||
| Information Technology | 0.26 | 0.26 | 0.29 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Debt to assets = Total debt ÷ Total assets
= 1,293,738 ÷ 3,383,012 = 0.38
2 Click competitor name to see calculations.
The solvency profile exhibits a cycle of rapid capital expansion followed by a period of stabilization and relative deleveraging. Between 2019 and 2023, there was a significant increase in both total debt and total assets, reflecting a period of aggressive balance sheet growth.
- Debt to Assets Ratio Trajectory
- The debt to assets ratio experienced a sharp increase from 0.15 in 2019 to a peak of 0.50 in 2021. This upward trend indicates that the company significantly increased its reliance on debt to finance its asset base during this period. However, a reversal is observed starting in 2022, with the ratio declining to 0.42 and further decreasing to 0.38 by December 31, 2023.
- Analysis of Debt and Asset Growth
- Total debt grew substantially from approximately $105.5 million in 2019 to a plateau of roughly $1.29 billion by 2023. Concurrently, total assets grew from $713.2 million to $3.38 billion. The peak in the solvency ratio in 2021 coincides with the most rapid phase of debt accumulation.
- Solvency Improvement Insights
- The reduction in the debt to assets ratio from 0.50 in 2021 to 0.38 in 2023 occurred despite total debt remaining nearly constant between 2022 and 2023. This suggests that the improvement in the solvency ratio was driven primarily by continued asset growth rather than a reduction in absolute debt levels, indicating an improved margin of safety for creditors.
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Debt to Assets (including Operating Lease Liability)
Enphase Energy Inc., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Debt, current | —) | 90,892) | 86,052) | 325,967) | 2,884) | |
| Debt, non-current | 1,293,738) | 1,199,465) | 951,594) | 4,898) | 102,659) | |
| Total debt | 1,293,738) | 1,290,357) | 1,037,646) | 330,865) | 105,543) | |
| Operating lease liabilities, current | 5,220) | 5,371) | 3,830) | 4,542) | 3,170) | |
| Operating lease liabilities, non-current (Other liabilities) | 18,802) | 19,077) | 11,920) | 15,209) | 9,542) | |
| Total debt (including operating lease liability) | 1,317,760) | 1,314,805) | 1,053,396) | 350,616) | 118,255) | |
| Total assets | 3,383,012) | 3,084,280) | 2,079,256) | 1,200,102) | 713,223) | |
| Solvency Ratio | ||||||
| Debt to assets (including operating lease liability)1 | 0.39 | 0.43 | 0.51 | 0.29 | 0.17 | |
| Benchmarks | ||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||
| Advanced Micro Devices Inc. | 0.05 | 0.04 | 0.06 | — | — | |
| Analog Devices Inc. | 0.15 | 0.14 | 0.14 | 0.25 | — | |
| Applied Materials Inc. | 0.20 | 0.22 | 0.22 | 0.26 | — | |
| Broadcom Inc. | 0.54 | 0.55 | 0.53 | 0.55 | — | |
| Intel Corp. | 0.26 | 0.23 | 0.23 | — | — | |
| KLA Corp. | 0.43 | 0.54 | 0.35 | — | — | |
| Lam Research Corp. | 0.28 | 0.30 | 0.33 | — | — | |
| Marvell Technology Inc. | 0.21 | 0.21 | 0.12 | — | — | |
| NVIDIA Corp. | 0.29 | 0.27 | 0.27 | — | — | |
| Qualcomm Inc. | 0.31 | 0.33 | 0.40 | 0.46 | — | |
| Texas Instruments Inc. | 0.36 | 0.34 | 0.33 | — | — | |
| Debt to Assets (including Operating Lease Liability), Sector | ||||||
| Semiconductors & Semiconductor Equipment | 0.27 | 0.25 | 0.27 | — | — | |
| Debt to Assets (including Operating Lease Liability), Industry | ||||||
| Information Technology | 0.28 | 0.29 | 0.31 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 1,317,760 ÷ 3,383,012 = 0.39
2 Click competitor name to see calculations.
The solvency profile of the entity between 2019 and 2023 is characterized by a period of aggressive leverage expansion followed by a phase of asset-led stabilization. While total liabilities grew substantially over the five-year period, the concurrent growth in the asset base has mitigated the overall solvency risk in recent years.
- Total Debt Accumulation
- A significant upward trend in total debt, including operating lease liabilities, is observed from 2019 to 2022. Total debt rose from 118,255 thousand US dollars in 2019 to a peak of 1,314,805 thousand US dollars in 2022. Growth was most pronounced between 2020 and 2021, where debt tripled. By 2023, this trend plateaued, with total debt remaining nearly flat at 1,317,760 thousand US dollars.
- Total Asset Growth
- Total assets demonstrated consistent and rapid growth throughout the analyzed period, increasing from 713,223 thousand US dollars in 2019 to 3,383,012 thousand US dollars in 2023. This represents a growth factor of approximately 4.7 times over five years, indicating a sustained expansion of the company's resource base.
- Debt to Assets Ratio Dynamics
- The debt to assets ratio exhibits a parabolic trajectory, peaking in 2021 at 0.51. This indicates that at its peak, slightly more than half of the total assets were financed through debt and lease liabilities. However, a downward trend is observed from 2022 onwards, with the ratio declining to 0.43 in 2022 and further to 0.39 by 2023. This reduction in the ratio, occurring while total debt remained stable, confirms that asset growth outpaced debt accumulation in the final two years of the period, thereby improving the overall solvency position.
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Financial Leverage
Enphase Energy Inc., financial leverage calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Total assets | 3,383,012) | 3,084,280) | 2,079,256) | 1,200,102) | 713,223) | |
| Stockholders’ equity | 983,624) | 825,573) | 430,168) | 483,993) | 272,212) | |
| Solvency Ratio | ||||||
| Financial leverage1 | 3.44 | 3.74 | 4.83 | 2.48 | 2.62 | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| Advanced Micro Devices Inc. | 1.21 | 1.23 | 1.66 | — | — | |
| Analog Devices Inc. | 1.37 | 1.38 | 1.38 | 1.79 | — | |
| Applied Materials Inc. | 1.88 | 2.19 | 2.11 | 2.11 | — | |
| Broadcom Inc. | 3.04 | 3.23 | 3.03 | 3.18 | — | |
| Intel Corp. | 1.81 | 1.80 | 1.77 | — | — | |
| KLA Corp. | 4.82 | 8.99 | 3.04 | — | — | |
| Lam Research Corp. | 2.29 | 2.74 | 2.64 | — | — | |
| Marvell Technology Inc. | 1.44 | 1.41 | 1.28 | — | — | |
| Micron Technology Inc. | 1.46 | 1.33 | 1.34 | — | — | |
| NVIDIA Corp. | 1.86 | 1.66 | 1.70 | — | — | |
| Qualcomm Inc. | 2.37 | 2.72 | 4.14 | 5.86 | — | |
| Texas Instruments Inc. | 1.91 | 1.87 | 1.85 | — | — | |
| Financial Leverage, Sector | ||||||
| Semiconductors & Semiconductor Equipment | 1.78 | 1.77 | 1.87 | — | — | |
| Financial Leverage, Industry | ||||||
| Information Technology | 2.53 | 2.65 | 2.87 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Financial leverage = Total assets ÷ Stockholders’ equity
= 3,383,012 ÷ 983,624 = 3.44
2 Click competitor name to see calculations.
The financial position from 2019 to 2023 is characterized by rapid asset expansion and a fluctuating yet overall increasing equity base, resulting in a period of heightened financial leverage followed by a gradual reduction.
- Asset Growth Trend
- Total assets experienced a continuous and substantial increase, rising from 713,223 thousand US dollars in 2019 to 3,383,012 thousand US dollars by the end of 2023. This represents a significant scaling of the balance sheet, with the most aggressive growth occurring between 2020 and 2022.
- Equity Base Evolution
- Stockholders' equity grew from 272,212 thousand US dollars in 2019 to 983,624 thousand US dollars in 2023. While the overall trajectory remained positive, a slight contraction was observed in 2021, where equity decreased to 430,168 thousand US dollars from 483,993 thousand US dollars in the preceding year, before recovering strongly in the following two periods.
- Financial Leverage Dynamics
- The financial leverage ratio exhibited notable volatility, peaking in 2021 at 4.83. This spike was driven by the combination of rapidly increasing total assets and a simultaneous dip in stockholders' equity. Following this peak, a consistent downward trend is observed, with the ratio declining to 3.74 in 2022 and further to 3.44 in 2023. This trend indicates a gradual deleveraging process and an improving balance between equity financing and total asset accumulation.
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Interest Coverage
Enphase Energy Inc., interest coverage calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net income | 438,936) | 397,362) | 145,449) | 133,995) | 161,148) | |
| Add: Income tax expense | 74,203) | 54,686) | (24,521) | (14,585) | (71,034) | |
| Add: Interest expense | 8,839) | 9,438) | 45,152) | 21,001) | 9,691) | |
| Earnings before interest and tax (EBIT) | 521,978) | 461,486) | 166,080) | 140,411) | 99,805) | |
| Solvency Ratio | ||||||
| Interest coverage1 | 59.05 | 48.90 | 3.68 | 6.69 | 10.30 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| Advanced Micro Devices Inc. | 5.79 | 14.61 | 109.09 | — | — | |
| Analog Devices Inc. | 14.63 | 16.46 | 8.19 | 7.79 | — | |
| Applied Materials Inc. | 33.42 | 34.33 | 29.69 | 18.36 | — | |
| Broadcom Inc. | 10.31 | 8.16 | 4.59 | 2.37 | — | |
| Intel Corp. | 1.87 | 16.66 | 37.35 | — | — | |
| KLA Corp. | 13.76 | 22.76 | 16.00 | — | — | |
| Lam Research Corp. | 28.40 | 29.11 | 21.95 | — | — | |
| Marvell Technology Inc. | 1.50 | -2.47 | -3.65 | — | — | |
| Micron Technology Inc. | -13.58 | 51.66 | 35.18 | — | — | |
| NVIDIA Corp. | 16.96 | 43.12 | 24.96 | — | — | |
| Qualcomm Inc. | 11.72 | 31.61 | 19.38 | 10.50 | — | |
| Texas Instruments Inc. | 22.01 | 47.88 | 49.47 | — | — | |
| Interest Coverage, Sector | ||||||
| Semiconductors & Semiconductor Equipment | 10.17 | 20.45 | 18.07 | — | — | |
| Interest Coverage, Industry | ||||||
| Information Technology | 17.37 | 22.18 | 19.66 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Interest coverage = EBIT ÷ Interest expense
= 521,978 ÷ 8,839 = 59.05
2 Click competitor name to see calculations.
The company exhibits a significant strengthening of its solvency position over the five-year period ending December 31, 2023. The capacity to meet interest obligations transitioned from a period of relative contraction to a state of substantial excess coverage, driven by aggressive operational growth and a reduction in financing costs.
- Earnings Before Interest and Tax (EBIT) Growth
- A consistent and accelerating upward trajectory in EBIT is observed, rising from US$ 99.8 million in 2019 to US$ 522.0 million in 2023. A particularly sharp increase occurred between 2021 and 2022, where earnings nearly tripled, substantially enhancing the company's ability to cover its fixed financial obligations.
- Interest Expense Trends
- Interest expenses followed a non-linear path, increasing from US$ 9.7 million in 2019 to a peak of US$ 45.2 million in 2021. Following this peak, a drastic reduction occurred in 2022, with expenses falling to US$ 9.4 million, and further decreasing to US$ 8.8 million by 2023. This suggests a significant deleveraging event or a restructuring of debt obligations.
- Interest Coverage Ratio Analysis
- The interest coverage ratio experienced a downward trend from 2019 to 2021, declining from 10.30 to 3.68 as interest expenses grew at a faster rate than operating income. This trend reversed abruptly in 2022, with the ratio surging to 48.90, and reaching 59.05 by 2023. The current ratio indicates an exceptionally high margin of safety, reflecting a minimal risk of default on interest payments due to the combination of expanded profitability and diminished interest burdens.
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Fixed Charge Coverage
Enphase Energy Inc., fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net income | 438,936) | 397,362) | 145,449) | 133,995) | 161,148) | |
| Add: Income tax expense | 74,203) | 54,686) | (24,521) | (14,585) | (71,034) | |
| Add: Interest expense | 8,839) | 9,438) | 45,152) | 21,001) | 9,691) | |
| Earnings before interest and tax (EBIT) | 521,978) | 461,486) | 166,080) | 140,411) | 99,805) | |
| Add: Operating lease costs | 10,406) | 8,222) | 7,049) | 5,332) | 4,041) | |
| Earnings before fixed charges and tax | 532,384) | 469,708) | 173,129) | 145,743) | 103,846) | |
| Interest expense | 8,839) | 9,438) | 45,152) | 21,001) | 9,691) | |
| Operating lease costs | 10,406) | 8,222) | 7,049) | 5,332) | 4,041) | |
| Fixed charges | 19,245) | 17,660) | 52,201) | 26,333) | 13,732) | |
| Solvency Ratio | ||||||
| Fixed charge coverage1 | 27.66 | 26.60 | 3.32 | 5.53 | 7.56 | |
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors2 | ||||||
| Advanced Micro Devices Inc. | 3.18 | 6.82 | 36.00 | — | — | |
| Analog Devices Inc. | 11.89 | 12.87 | 6.64 | 6.48 | — | |
| Applied Materials Inc. | 23.69 | 24.67 | 22.50 | 14.48 | — | |
| Broadcom Inc. | 9.81 | 6.55 | 3.70 | 1.92 | — | |
| Intel Corp. | 1.59 | 7.34 | 16.56 | — | — | |
| KLA Corp. | 12.19 | 18.72 | 13.03 | — | — | |
| Lam Research Corp. | 20.49 | 21.44 | 17.80 | — | — | |
| Marvell Technology Inc. | 1.39 | -1.40 | -1.75 | — | — | |
| NVIDIA Corp. | 10.19 | 25.61 | 14.40 | — | — | |
| Qualcomm Inc. | 9.29 | 22.52 | 14.48 | 8.30 | — | |
| Texas Instruments Inc. | 18.41 | 36.70 | 36.25 | — | — | |
| Fixed Charge Coverage, Sector | ||||||
| Semiconductors & Semiconductor Equipment | 8.27 | 14.17 | 12.68 | — | — | |
| Fixed Charge Coverage, Industry | ||||||
| Information Technology | 11.23 | 13.28 | 12.13 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 532,384 ÷ 19,245 = 27.66
2 Click competitor name to see calculations.
An analysis of the solvency profile between 2019 and 2023 reveals a significant strengthening of the capacity to cover fixed obligations. The period is characterized by a transition from a phase of increasing fixed costs and narrowing margins to a phase of rapid earnings acceleration and optimized charge structures.
- Earnings Before Fixed Charges and Tax
- A consistent upward trajectory is observed in earnings, which grew from 103,846 thousand US dollars in 2019 to 532,384 thousand US dollars by 2023. The most pronounced growth occurred between 2021 and 2022, where earnings increased by approximately 171%, indicating a substantial expansion in operational profitability.
- Fixed Charges
- Fixed charges exhibited a period of growth from 2019 through 2021, peaking at 52,201 thousand US dollars. However, a significant reduction occurred in 2022, with charges falling to 17,660 thousand US dollars, and remaining relatively stable at 19,245 thousand US dollars in 2023. This shift indicates a reduction in the burden of fixed financial obligations.
- Fixed Charge Coverage Ratio
- The coverage ratio experienced a notable decline from 7.56 in 2019 to a low of 3.32 in 2021, coinciding with the peak in fixed charges. This trend reversed sharply in 2022, as the combination of surging earnings and reduced fixed charges pushed the ratio to 26.60, further increasing to 27.66 in 2023. The current ratio suggests a very high margin of safety and an exceptional capacity to service fixed obligations from operating profits.
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