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)
Edwards Lifesciences Corp., solvency ratios
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
- Debt Ratios
- The Debt to Equity ratio exhibited a consistent declining trend over the observed periods, decreasing from 0.35 in 2017 to 0.10 in 2021. This decline remained evident even when including operating lease liabilities, where the ratio dropped from 0.35 to 0.12. Similarly, the Debt to Capital ratio decreased from 0.26 to 0.09, and when accounting for operating lease liabilities, it followed a similar downward trajectory from 0.26 to 0.11. The Debt to Assets ratio also demonstrated a steady decline from 0.18 to 0.07, with a slight increase in 2019 and 2020 when including operating lease liabilities, yet still maintaining an overall decrease from 0.18 to 0.08 by 2021.
- Financial Leverage
- Financial leverage decreased gradually from 1.93 in 2017 to 1.46 in 2021, indicating a reduced reliance on debt financing relative to equity over time. The ratio showed a slight increase in 2020 compared to 2019, but the overall trend remained downward.
- Interest Coverage
- Interest coverage ratios fluctuated significantly, beginning at 45.61 in 2017, dipping to 26.46 in 2018, then substantially increasing to a high of 93.5 in 2021. This pronounced increase suggests a significant improvement in the company's ability to meet interest obligations from operating earnings, particularly in the final year.
- Fixed Charge Coverage
- Fixed charge coverage exhibited variability, declining from 21.49 in 2017 to 14.38 in 2018, then recovering to 25 in 2019 before falling again to 20.8 in 2020, and finally rising sharply to 36.38 in 2021. This pattern indicates fluctuations in the company's capacity to cover fixed financial charges, with marked improvement in the most recent year.
Debt Ratios
Coverage Ratios
Debt to Equity
Edwards Lifesciences Corp., debt to equity calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Short-term debt | —) | —) | —) | —) | 598,000) | |
| Long-term debt | 595,700) | 595,000) | 594,400) | 593,800) | 438,400) | |
| Total debt | 595,700) | 595,000) | 594,400) | 593,800) | 1,036,400) | |
| Stockholders’ equity | 5,835,900) | 4,574,300) | 4,148,300) | 3,140,400) | 2,956,200) | |
| Solvency Ratio | ||||||
| Debt to equity1 | 0.10 | 0.13 | 0.14 | 0.19 | 0.35 | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| Abbott Laboratories | 0.50 | 0.57 | — | — | — | |
| Elevance Health Inc. | 0.64 | 0.60 | — | — | — | |
| Intuitive Surgical Inc. | 0.00 | 0.00 | — | — | — | |
| Medtronic PLC | 0.51 | 0.49 | — | — | — | |
| UnitedHealth Group Inc. | 0.64 | 0.66 | — | — | — | |
| Debt to Equity, Sector | ||||||
| Health Care Equipment & Services | 0.55 | 0.56 | — | — | — | |
| Debt to Equity, Industry | ||||||
| Health Care | 0.80 | 0.92 | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to equity = Total debt ÷ Stockholders’ equity
= 595,700 ÷ 5,835,900 = 0.10
2 Click competitor name to see calculations.
- Total Debt
- The total debt demonstrates a significant decline from US$1,036,400 thousand at the end of 2017 to approximately US$594,000 thousand in 2019. Following this reduction, the debt level stabilizes, maintaining a narrow range between US$594,000 thousand and US$595,700 thousand through 2021. This suggests a strategic effort to reduce leverage early on, followed by a consistent borrowing level in recent years.
- Stockholders’ Equity
- Stockholders’ equity exhibits a consistent and substantial increase throughout the period. Starting at US$2,956,200 thousand in 2017, it grows steadily each year to reach US$5,835,900 thousand by the end of 2021. This upward trend reflects an accumulation of retained earnings, possible equity injections, or appreciation in asset values, which positively affects the company’s financial strength.
- Debt to Equity Ratio
- There is a marked downward trend in the debt to equity ratio, declining from 0.35 in 2017 to 0.10 in 2021. This decreasing ratio indicates an improving capital structure, with a reduction in financial leverage relative to equity. It suggests that the company has increasingly relied on equity financing over debt, enhancing financial stability and potentially lowering financial risk.
Debt to Equity (including Operating Lease Liability)
Edwards Lifesciences Corp., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Short-term debt | —) | —) | —) | —) | 598,000) | |
| Long-term debt | 595,700) | 595,000) | 594,400) | 593,800) | 438,400) | |
| Total debt | 595,700) | 595,000) | 594,400) | 593,800) | 1,036,400) | |
| Operating lease liabilities, current portion | 25,500) | 27,200) | 25,500) | —) | —) | |
| Operating lease liabilities, long-term portion | 69,100) | 72,700) | 58,900) | —) | —) | |
| Total debt (including operating lease liability) | 690,300) | 694,900) | 678,800) | 593,800) | 1,036,400) | |
| Stockholders’ equity | 5,835,900) | 4,574,300) | 4,148,300) | 3,140,400) | 2,956,200) | |
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | 0.12 | 0.15 | 0.16 | 0.19 | 0.35 | |
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| Abbott Laboratories | 0.54 | 0.61 | — | — | — | |
| Elevance Health Inc. | 0.67 | 0.63 | — | — | — | |
| Intuitive Surgical Inc. | 0.01 | 0.01 | — | — | — | |
| Medtronic PLC | 0.53 | 0.51 | — | — | — | |
| UnitedHealth Group Inc. | 0.70 | 0.73 | — | — | — | |
| Debt to Equity (including Operating Lease Liability), Sector | ||||||
| Health Care Equipment & Services | 0.58 | 0.60 | — | — | — | |
| Debt to Equity (including Operating Lease Liability), Industry | ||||||
| Health Care | 0.83 | 0.95 | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Stockholders’ equity
= 690,300 ÷ 5,835,900 = 0.12
2 Click competitor name to see calculations.
- Total debt (including operating lease liability)
- The total debt exhibited a declining trend from 2017 to 2018, decreasing significantly from approximately 1,036,400 thousand US dollars to 593,800 thousand US dollars. Thereafter, slight increases were observed in 2019 and 2020, reaching 678,800 and 694,900 thousand US dollars respectively, followed by a marginal decrease in 2021 to 690,300 thousand US dollars. Overall, the total debt reduced substantially over the five-year period.
- Stockholders’ equity
- Stockholders’ equity showed consistent and robust growth over the years, increasing steadily from 2,956,200 thousand US dollars in 2017 to 5,835,900 thousand US dollars in 2021. This represents a near doubling of equity during the period, indicating strengthening financial position and increased shareholders' capital.
- Debt to equity (including operating lease liability) ratio
- The debt to equity ratio displayed a declining pattern, dropping from 0.35 in 2017 to 0.12 in 2021. This decrease reflects a reduction in financial leverage as the company decreased its debt relative to equity. The ratio's consistent downward movement suggests improved solvency and a shift towards a more equity-financed capital structure.
Debt to Capital
Edwards Lifesciences Corp., debt to capital calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Short-term debt | —) | —) | —) | —) | 598,000) | |
| Long-term debt | 595,700) | 595,000) | 594,400) | 593,800) | 438,400) | |
| Total debt | 595,700) | 595,000) | 594,400) | 593,800) | 1,036,400) | |
| Stockholders’ equity | 5,835,900) | 4,574,300) | 4,148,300) | 3,140,400) | 2,956,200) | |
| Total capital | 6,431,600) | 5,169,300) | 4,742,700) | 3,734,200) | 3,992,600) | |
| Solvency Ratio | ||||||
| Debt to capital1 | 0.09 | 0.12 | 0.13 | 0.16 | 0.26 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| Abbott Laboratories | 0.34 | 0.36 | — | — | — | |
| Elevance Health Inc. | 0.39 | 0.38 | — | — | — | |
| Intuitive Surgical Inc. | 0.00 | 0.00 | — | — | — | |
| Medtronic PLC | 0.34 | 0.33 | — | — | — | |
| UnitedHealth Group Inc. | 0.39 | 0.40 | — | — | — | |
| Debt to Capital, Sector | ||||||
| Health Care Equipment & Services | 0.35 | 0.36 | — | — | — | |
| Debt to Capital, Industry | ||||||
| Health Care | 0.44 | 0.48 | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to capital = Total debt ÷ Total capital
= 595,700 ÷ 6,431,600 = 0.09
2 Click competitor name to see calculations.
- Total debt
- The total debt exhibited a notable decline from 1,036,400 thousand US dollars in 2017 to approximately 593,800 thousand US dollars in 2018. Following this sharp decrease, the total debt stabilized, remaining relatively constant around 594,400 to 595,700 thousand US dollars through to the end of 2021.
- Total capital
- Total capital demonstrated an overall upward trajectory throughout the period. Starting at 3,992,600 thousand US dollars in 2017, it initially decreased slightly to 3,734,200 thousand US dollars in 2018. From 2018 onward, total capital consistently grew each year, reaching 6,431,600 thousand US dollars by the end of 2021, reflecting substantial capital accumulation and expansion over the five-year period.
- Debt to capital ratio
- The debt to capital ratio showed a steady and significant decline over the analyzed years. Beginning at 0.26 in 2017, the ratio decreased markedly to 0.16 in 2018 and continued to trend downward to 0.09 by 2021. This trend indicates an increasing reliance on capital over debt to finance the company's operations, signifying improving financial leverage and potentially reduced financial risk.
Debt to Capital (including Operating Lease Liability)
Edwards Lifesciences Corp., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Short-term debt | —) | —) | —) | —) | 598,000) | |
| Long-term debt | 595,700) | 595,000) | 594,400) | 593,800) | 438,400) | |
| Total debt | 595,700) | 595,000) | 594,400) | 593,800) | 1,036,400) | |
| Operating lease liabilities, current portion | 25,500) | 27,200) | 25,500) | —) | —) | |
| Operating lease liabilities, long-term portion | 69,100) | 72,700) | 58,900) | —) | —) | |
| Total debt (including operating lease liability) | 690,300) | 694,900) | 678,800) | 593,800) | 1,036,400) | |
| Stockholders’ equity | 5,835,900) | 4,574,300) | 4,148,300) | 3,140,400) | 2,956,200) | |
| Total capital (including operating lease liability) | 6,526,200) | 5,269,200) | 4,827,100) | 3,734,200) | 3,992,600) | |
| Solvency Ratio | ||||||
| Debt to capital (including operating lease liability)1 | 0.11 | 0.13 | 0.14 | 0.16 | 0.26 | |
| Benchmarks | ||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||
| Abbott Laboratories | 0.35 | 0.38 | — | — | — | |
| Elevance Health Inc. | 0.40 | 0.39 | — | — | — | |
| Intuitive Surgical Inc. | 0.01 | 0.01 | — | — | — | |
| Medtronic PLC | 0.35 | 0.34 | — | — | — | |
| UnitedHealth Group Inc. | 0.41 | 0.42 | — | — | — | |
| Debt to Capital (including Operating Lease Liability), Sector | ||||||
| Health Care Equipment & Services | 0.37 | 0.37 | — | — | — | |
| Debt to Capital (including Operating Lease Liability), Industry | ||||||
| Health Care | 0.45 | 0.49 | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 690,300 ÷ 6,526,200 = 0.11
2 Click competitor name to see calculations.
- Total debt (including operating lease liability)
- The total debt exhibited a marked decline from US$1,036,400 thousand in 2017 to US$593,800 thousand in 2018. Following this, there was a moderate increase in 2019 to US$678,800 thousand, with a relatively stable level in 2020 and 2021, recorded at US$694,900 thousand and US$690,300 thousand respectively. Overall, the trend suggests an initial significant debt reduction followed by stabilization at a lower debt level compared to 2017.
- Total capital (including operating lease liability)
- Total capital showed a downward movement from 2017 (US$3,992,600 thousand) to 2018 (US$3,734,200 thousand). Subsequently, there was a pronounced increase in 2019, reaching US$4,827,100 thousand, and this upward trajectory continued through 2020 and 2021, culminating at US$6,526,200 thousand. The data indicates a strong capital expansion especially after 2018, reflecting considerable growth or equity infusion over the latter years.
- Debt to capital (including operating lease liability)
- The debt to capital ratio consistently decreased over the examined period, starting at 0.26 in 2017 and dropping steadily to 0.11 by 2021. This decline corresponds with the combined effects of decreasing debt and increasing capital, illustrating an improving capital structure characterized by reduced reliance on debt financing relative to the total capital base.
Debt to Assets
Edwards Lifesciences Corp., debt to assets calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Short-term debt | —) | —) | —) | —) | 598,000) | |
| Long-term debt | 595,700) | 595,000) | 594,400) | 593,800) | 438,400) | |
| Total debt | 595,700) | 595,000) | 594,400) | 593,800) | 1,036,400) | |
| Total assets | 8,502,600) | 7,237,100) | 6,488,100) | 5,323,700) | 5,695,800) | |
| Solvency Ratio | ||||||
| Debt to assets1 | 0.07 | 0.08 | 0.09 | 0.11 | 0.18 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| Abbott Laboratories | 0.24 | 0.26 | — | — | — | |
| Elevance Health Inc. | 0.24 | 0.23 | — | — | — | |
| Intuitive Surgical Inc. | 0.00 | 0.00 | — | — | — | |
| Medtronic PLC | 0.28 | 0.27 | — | — | — | |
| UnitedHealth Group Inc. | 0.22 | 0.22 | — | — | — | |
| Debt to Assets, Sector | ||||||
| Health Care Equipment & Services | 0.23 | 0.23 | — | — | — | |
| Debt to Assets, Industry | ||||||
| Health Care | 0.30 | 0.32 | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to assets = Total debt ÷ Total assets
= 595,700 ÷ 8,502,600 = 0.07
2 Click competitor name to see calculations.
- Total Debt
- The total debt decreased substantially from 1,036,400 thousand USD at the end of 2017 to 593,800 thousand USD at the end of 2018. Thereafter, it remained relatively stable with slight increases to 594,400 thousand USD in 2019, 595,000 thousand USD in 2020, and 595,700 thousand USD in 2021.
- Total Assets
- Total assets exhibited a steady upward trend over the period. Starting from 5,695,800 thousand USD in 2017, assets declined slightly to 5,323,700 thousand USD in 2018. However, from 2018 onwards, assets increased significantly each year, reaching 6,488,100 thousand USD in 2019, 7,237,100 thousand USD in 2020, and 8,502,600 thousand USD in 2021.
- Debt to Assets Ratio
- The debt to assets ratio showed a consistent decline throughout the analyzed period, falling from 0.18 in 2017 to 0.07 in 2021. This trend reflects a reduction in leverage relative to asset base, predominantly driven by the reduction in total debt in 2018 and the substantial growth in total assets in subsequent years.
Debt to Assets (including Operating Lease Liability)
Edwards Lifesciences Corp., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Short-term debt | —) | —) | —) | —) | 598,000) | |
| Long-term debt | 595,700) | 595,000) | 594,400) | 593,800) | 438,400) | |
| Total debt | 595,700) | 595,000) | 594,400) | 593,800) | 1,036,400) | |
| Operating lease liabilities, current portion | 25,500) | 27,200) | 25,500) | —) | —) | |
| Operating lease liabilities, long-term portion | 69,100) | 72,700) | 58,900) | —) | —) | |
| Total debt (including operating lease liability) | 690,300) | 694,900) | 678,800) | 593,800) | 1,036,400) | |
| Total assets | 8,502,600) | 7,237,100) | 6,488,100) | 5,323,700) | 5,695,800) | |
| Solvency Ratio | ||||||
| Debt to assets (including operating lease liability)1 | 0.08 | 0.10 | 0.10 | 0.11 | 0.18 | |
| Benchmarks | ||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||
| Abbott Laboratories | 0.26 | 0.27 | — | — | — | |
| Elevance Health Inc. | 0.25 | 0.24 | — | — | — | |
| Intuitive Surgical Inc. | 0.01 | 0.01 | — | — | — | |
| Medtronic PLC | 0.29 | 0.28 | — | — | — | |
| UnitedHealth Group Inc. | 0.24 | 0.24 | — | — | — | |
| Debt to Assets (including Operating Lease Liability), Sector | ||||||
| Health Care Equipment & Services | 0.25 | 0.25 | — | — | — | |
| Debt to Assets (including Operating Lease Liability), Industry | ||||||
| Health Care | 0.31 | 0.33 | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 690,300 ÷ 8,502,600 = 0.08
2 Click competitor name to see calculations.
- Total Debt (including operating lease liability)
- The total debt displayed a marked decrease from 1,036,400 thousand USD in 2017 to 593,800 thousand USD in 2018, representing a significant reduction. In the subsequent years, total debt showed a slight increase, reaching 694,900 thousand USD in 2020, before marginally decreasing again to 690,300 thousand USD in 2021. Overall, the debt levels declined sharply in the initial year and then stabilized with minor fluctuations thereafter.
- Total Assets
- Total assets exhibited a consistent and notable growth over the five-year period. Starting at 5,695,800 thousand USD in 2017, assets decreased slightly to 5,323,700 thousand USD in 2018 but then experienced strong upward momentum in the following years. By 2021, total assets had increased substantially to 8,502,600 thousand USD, indicating significant expansion in the company's asset base.
- Debt to Assets Ratio (including operating lease liability)
- The debt to assets ratio demonstrated a declining trend throughout the period analyzed. Starting at 0.18 in 2017, the ratio dropped markedly to 0.11 in 2018 and continued to decrease steadily through 2021, reaching 0.08. This trend indicates an improving leverage position, with debt constituting a smaller proportion of total assets over time, suggesting enhanced financial stability and potentially lower financial risk.
Financial Leverage
Edwards Lifesciences Corp., financial leverage calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Total assets | 8,502,600) | 7,237,100) | 6,488,100) | 5,323,700) | 5,695,800) | |
| Stockholders’ equity | 5,835,900) | 4,574,300) | 4,148,300) | 3,140,400) | 2,956,200) | |
| Solvency Ratio | ||||||
| Financial leverage1 | 1.46 | 1.58 | 1.56 | 1.70 | 1.93 | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| Abbott Laboratories | 2.10 | 2.21 | — | — | — | |
| Elevance Health Inc. | 2.70 | 2.61 | — | — | — | |
| Intuitive Surgical Inc. | 1.14 | 1.15 | — | — | — | |
| Medtronic PLC | 1.81 | 1.79 | — | — | — | |
| UnitedHealth Group Inc. | 2.96 | 3.01 | — | — | — | |
| Financial Leverage, Sector | ||||||
| Health Care Equipment & Services | 2.37 | 2.39 | — | — | — | |
| Financial Leverage, Industry | ||||||
| Health Care | 2.69 | 2.87 | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Financial leverage = Total assets ÷ Stockholders’ equity
= 8,502,600 ÷ 5,835,900 = 1.46
2 Click competitor name to see calculations.
- Total Assets
- The total assets exhibited an overall upward trend from 2017 through 2021. Starting at approximately 5.7 billion US dollars in 2017, assets declined moderately in 2018 to about 5.3 billion but then increased significantly each year, reaching approximately 8.5 billion by the end of 2021. This growth suggests a consistent expansion in the company's asset base over the five-year period, with a notable acceleration post-2018.
- Stockholders' Equity
- Stockholders’ equity demonstrated steady growth over the same period, rising from around 2.96 billion US dollars in 2017 to approximately 5.84 billion in 2021. The increase was particularly marked starting in 2019, indicating enhanced retained earnings or capital infusions, which contributed to strengthening the company’s net worth and financial foundation.
- Financial Leverage
- The financial leverage ratio showed a consistent declining trend from 1.93 in 2017 to 1.46 in 2021. This reduction implies a decrease in the use of debt relative to equity. Such a trend suggests the company has been progressively deleveraging, thereby potentially reducing financial risk and improving solvency.
Interest Coverage
Edwards Lifesciences Corp., interest coverage calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net income | 1,503,100) | 823,400) | 1,046,900) | 722,200) | 583,600) | |
| Add: Income tax expense | 198,900) | 93,300) | 119,600) | 39,200) | 451,300) | |
| Add: Interest expense | 18,400) | 15,800) | 20,700) | 29,900) | 23,200) | |
| Earnings before interest and tax (EBIT) | 1,720,400) | 932,500) | 1,187,200) | 791,300) | 1,058,100) | |
| Solvency Ratio | ||||||
| Interest coverage1 | 93.50 | 59.02 | 57.35 | 26.46 | 45.61 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| Abbott Laboratories | 16.41 | 10.10 | — | — | — | |
| Elevance Health Inc. | 10.93 | 8.96 | — | — | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | |
| Medtronic PLC | 5.21 | 4.71 | — | — | — | |
| UnitedHealth Group Inc. | 14.44 | 13.47 | — | — | — | |
| Interest Coverage, Sector | ||||||
| Health Care Equipment & Services | 12.30 | 10.11 | — | — | — | |
| Interest Coverage, Industry | ||||||
| Health Care | 14.14 | 8.31 | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Interest coverage = EBIT ÷ Interest expense
= 1,720,400 ÷ 18,400 = 93.50
2 Click competitor name to see calculations.
- Earnings before interest and tax (EBIT)
- The EBIT values demonstrate a fluctuating yet overall upward trend over the analyzed period. Starting at approximately 1.06 billion US dollars at the end of 2017, EBIT declined to around 791 million by the end of 2018. This was followed by a substantial recovery in 2019, with EBIT increasing to nearly 1.19 billion. The subsequent year, 2020, saw a decrease again to approximately 933 million, but the trend reversed significantly in 2021, reaching a peak of about 1.72 billion. The data suggest variability in operating profitability, with a strong rebound and growth by the last year observed.
- Interest expense
- Interest expense displayed moderate fluctuations without a clear directional trend. The amount increased from 23.2 million US dollars in 2017 to 29.9 million in 2018, then decreased to 20.7 million in 2019, further declining to 15.8 million in 2020 before increasing slightly to 18.4 million in 2021. Overall, interest expense remained relatively low and stable in comparison to EBIT levels, indicating manageable debt servicing costs across the years.
- Interest coverage ratio
- The interest coverage ratio, which measures the company’s ability to cover interest expenses with its EBIT, showed a strong upward trajectory throughout the period. Starting at 45.61 in 2017, it decreased to 26.46 in 2018, aligning with the dip in EBIT and rise in interest expense that year. However, it improved significantly to 57.35 in 2019 and remained robust at 59.02 in 2020 before jumping sharply to 93.5 in 2021. This indicates enhanced financial health and stronger capacity to meet interest obligations over time, particularly in the most recent year analyzed.
Fixed Charge Coverage
Edwards Lifesciences Corp., fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net income | 1,503,100) | 823,400) | 1,046,900) | 722,200) | 583,600) | |
| Add: Income tax expense | 198,900) | 93,300) | 119,600) | 39,200) | 451,300) | |
| Add: Interest expense | 18,400) | 15,800) | 20,700) | 29,900) | 23,200) | |
| Earnings before interest and tax (EBIT) | 1,720,400) | 932,500) | 1,187,200) | 791,300) | 1,058,100) | |
| Add: Operating lease costs | 29,700) | 30,500) | 27,900) | 27,000) | 27,300) | |
| Earnings before fixed charges and tax | 1,750,100) | 963,000) | 1,215,100) | 818,300) | 1,085,400) | |
| Interest expense | 18,400) | 15,800) | 20,700) | 29,900) | 23,200) | |
| Operating lease costs | 29,700) | 30,500) | 27,900) | 27,000) | 27,300) | |
| Fixed charges | 48,100) | 46,300) | 48,600) | 56,900) | 50,500) | |
| Solvency Ratio | ||||||
| Fixed charge coverage1 | 36.38 | 20.80 | 25.00 | 14.38 | 21.49 | |
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors2 | ||||||
| Abbott Laboratories | 10.21 | 6.68 | — | — | — | |
| Elevance Health Inc. | 8.48 | 6.10 | — | — | — | |
| Intuitive Surgical Inc. | 93.66 | 58.48 | — | — | — | |
| Medtronic PLC | 4.31 | 3.98 | — | — | — | |
| UnitedHealth Group Inc. | 8.80 | 8.51 | — | — | — | |
| Fixed Charge Coverage, Sector | ||||||
| Health Care Equipment & Services | 8.36 | 6.96 | — | — | — | |
| Fixed Charge Coverage, Industry | ||||||
| Health Care | 10.48 | 6.39 | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 1,750,100 ÷ 48,100 = 36.38
2 Click competitor name to see calculations.
- Earnings before Fixed Charges and Tax
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The earnings before fixed charges and tax demonstrated variability over the five-year period. Initially, there was a decline from 1,085,400 thousand US dollars in 2017 to 818,300 thousand US dollars in 2018. This was followed by a recovery and increase to 1,215,100 thousand US dollars in 2019. The figure then decreased again in 2020 to 963,000 thousand US dollars but saw a significant rise to 1,750,100 thousand US dollars by the end of 2021. Overall, the trend appears cyclical with a notable peak in the last reported year.
- Fixed Charges
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Fixed charges remained relatively stable throughout the period, with a slight increase from 50,500 thousand US dollars in 2017 to 56,900 thousand US dollars in 2018. This was followed by a decline to 48,600 thousand US dollars in 2019 and a further small decrease to 46,300 thousand US dollars in 2020. In 2021, fixed charges increased marginally to 48,100 thousand US dollars. Overall, fixed charges exhibited limited fluctuation and a general stability in cost.
- Fixed Charge Coverage Ratio
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The fixed charge coverage ratio showed considerable fluctuation across the years, correlating inversely with fixed charge levels and earnings volatility. It started high at 21.49 in 2017, decreased significantly to 14.38 in 2018, then surged up to 25 in 2019. A decrease to 20.8 occurred in 2020 before an exceptional increase to 36.38 in 2021. This ratio indicates that the company’s ability to cover fixed charges improved markedly in 2021, reflecting the strong earnings growth relative to fixed charges in that year.