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
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).
Edwards Lifesciences Corp. demonstrates a consistent and significant strengthening of its solvency position between 2017 and 2021. The overarching trend is one of systematic deleveraging, characterized by a reduction in the reliance on borrowed capital relative to equity and total assets.
- Debt Leverage Ratios
- A pronounced downward trend is evident across all debt-related metrics. The debt-to-equity ratio decreased from 0.35 in 2017 to 0.10 in 2021, while the debt-to-assets ratio fell from 0.18 to 0.07 over the same period. Including operating lease liabilities does not significantly alter this trajectory, as those ratios followed an identical decline. This indicates a strategic shift toward equity-based funding or an aggressive repayment of outstanding obligations.
- Capital Structure
- The debt-to-capital ratio exhibited a steady decline from 0.26 in 2017 to 0.09 by 2021. This reduction confirms that debt constitutes an increasingly smaller portion of the total capital structure, thereby lowering the company's long-term financial risk profile.
- Coverage Ratios
- The capacity to service debt obligations has improved substantially, despite volatility in the early observation period. Interest coverage increased from 45.61 in 2017 to 93.50 in 2021, reflecting a significant increase in the margin of safety for interest payments. Similarly, the fixed charge coverage ratio, after a decline to 14.38 in 2018, recovered to 36.38 by 2021, indicating a robust ability to meet all fixed financial commitments.
- Financial Leverage
- The overall financial leverage ratio decreased from 1.93 in 2017 to 1.46 in 2021. Although a slight uptick occurred in 2020, the general trajectory confirms a reduction in the use of debt to finance assets, which enhances the overall stability of the balance sheet.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Debt to Equity
| 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 | — | — | — | — | |
| Elevance Health Inc. | 0.64 | — | — | — | — | |
| Intuitive Surgical Inc. | 0.00 | — | — | — | — | |
| Medtronic PLC | 0.51 | — | — | — | — | |
| UnitedHealth Group Inc. | 0.64 | — | — | — | — | |
| Debt to Equity, Sector | ||||||
| Health Care Equipment & Services | 0.55 | — | — | — | — | |
| Debt to Equity, Industry | ||||||
| Health Care | 0.80 | — | — | — | — | |
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.
A consistent improvement in the solvency profile is evident over the five-year period ending December 31, 2021. The overall trend reflects a strategic reduction in leverage combined with a substantial expansion of the equity base, resulting in a strengthened financial position and reduced reliance on borrowed capital.
- Total Debt Trends
- A significant reduction in total debt occurred between 2017 and 2018, where liabilities decreased from 1,036.4 million to 593.8 million. Following this initial contraction, debt levels remained remarkably stable, showing only marginal incremental increases through 2021, eventually settling at 595.7 million.
- Stockholders' Equity Growth
- Stockholders' equity demonstrated an uninterrupted upward trajectory, growing from 2,956.2 million in 2017 to 5,835.9 million by 2021. This represents a substantial increase in the company's net asset value, suggesting strong internal capital generation or equity financing over the analyzed period.
- Debt to Equity Ratio Analysis
- The debt to equity ratio exhibited a continuous and steep decline, falling from 0.35 in 2017 to 0.10 in 2021. The most pronounced decrease occurred between 2017 and 2018, directly correlating with the sharp reduction in total debt. The subsequent gradual decline from 0.19 in 2018 to 0.10 in 2021 was driven primarily by the steady growth in stockholders' equity while total debt remained nearly constant.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
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 | — | — | — | — | |
| Elevance Health Inc. | 0.67 | — | — | — | — | |
| Intuitive Surgical Inc. | 0.01 | — | — | — | — | |
| Medtronic PLC | 0.53 | — | — | — | — | |
| UnitedHealth Group Inc. | 0.70 | — | — | — | — | |
| Debt to Equity (including Operating Lease Liability), Sector | ||||||
| Health Care Equipment & Services | 0.58 | — | — | — | — | |
| Debt to Equity (including Operating Lease Liability), Industry | ||||||
| Health Care | 0.83 | — | — | — | — | |
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.
The analysis of solvency metrics between 2017 and 2021 reveals a consistent improvement in the company's financial leverage position. A clear trend toward reduced reliance on debt relative to shareholders' equity is observed throughout the period.
- Total Debt Trends
- A significant reduction in total debt, including operating lease liabilities, occurred between 2017 and 2018, decreasing from US$ 1,036,400 thousand to US$ 593,800 thousand. Following this decline, debt levels experienced moderate increases through 2020 before stabilizing at US$ 690,300 thousand by the end of 2021, remaining substantially lower than the 2017 peak.
- Stockholders' Equity Expansion
- Stockholders' equity demonstrated uninterrupted growth over the five-year interval. From a base of US$ 2,956,200 thousand in 2017, equity rose to US$ 5,835,900 thousand by 2021. This consistent upward trajectory indicates a strengthening of the company's net worth and an enhanced capacity to absorb potential losses.
- Debt to Equity Ratio Progression
- The debt to equity ratio exhibited a continuous downward trajectory, falling from 0.35 in 2017 to 0.12 in 2021. This contraction was driven by the combined effect of lower overall debt levels and a substantially larger equity base. The resulting ratio of 0.12 reflects a highly conservative capital structure and a diminished risk profile regarding long-term solvency.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Debt to Capital
| 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 | — | — | — | — | |
| Elevance Health Inc. | 0.39 | — | — | — | — | |
| Intuitive Surgical Inc. | 0.00 | — | — | — | — | |
| Medtronic PLC | 0.34 | — | — | — | — | |
| UnitedHealth Group Inc. | 0.39 | — | — | — | — | |
| Debt to Capital, Sector | ||||||
| Health Care Equipment & Services | 0.35 | — | — | — | — | |
| Debt to Capital, Industry | ||||||
| Health Care | 0.44 | — | — | — | — | |
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.
An analysis of the solvency position from 2017 to 2021 reveals a consistent strengthening of the financial structure, characterized by a significant reduction in leverage and a substantial expansion of the capital base.
- Total Debt Trends
- A sharp decline in total debt occurred between December 31, 2017, and December 31, 2018, falling from 1,036,400 thousand US$ to 593,800 thousand US$. Following this initial reduction, debt levels remained remarkably stable through 2021, exhibiting only marginal increases and ending the period at 595,700 thousand US$.
- Total Capital Expansion
- Total capital exhibited a strong upward trajectory after a slight contraction in 2018. From a low of 3,734,200 thousand US$ in 2018, capital grew steadily to 6,431,600 thousand US$ by December 31, 2021. This represents a significant increase in the overall financial resources available to the entity.
- Debt to Capital Ratio Analysis
- The debt to capital ratio demonstrates a continuous downward trend, decreasing from 0.26 in 2017 to 0.09 in 2021. This progression was driven initially by the aggressive reduction of debt in 2018 and subsequently by the consistent growth of total capital against a stagnant debt load. The result is a markedly lower reliance on borrowed funds relative to total capital, indicating improved long-term solvency and a reduced financial risk profile.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
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 | — | — | — | — | |
| Elevance Health Inc. | 0.40 | — | — | — | — | |
| Intuitive Surgical Inc. | 0.01 | — | — | — | — | |
| Medtronic PLC | 0.35 | — | — | — | — | |
| UnitedHealth Group Inc. | 0.41 | — | — | — | — | |
| Debt to Capital (including Operating Lease Liability), Sector | ||||||
| Health Care Equipment & Services | 0.37 | — | — | — | — | |
| Debt to Capital (including Operating Lease Liability), Industry | ||||||
| Health Care | 0.45 | — | — | — | — | |
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.
A comprehensive analysis of the solvency metrics indicates a significant strengthening of the financial structure from 2017 to 2021. The company transitioned toward a lower-leverage model, characterized by a steady reduction in the reliance on borrowed funds relative to its total capital base.
- Total Debt Trends
- A sharp contraction in total debt, including operating lease liabilities, occurred between 2017 and 2018, where liabilities decreased from US$ 1,036,400 thousand to US$ 593,800 thousand. From 2019 through 2021, debt levels remained relatively stable, fluctuating within a narrow range between US$ 678,800 thousand and US$ 694,900 thousand.
- Total Capital Expansion
- Total capital experienced a consistent upward trajectory following a slight dip in 2018. Starting at US$ 3,734,200 thousand in 2018, the capital base expanded substantially to reach US$ 6,526,200 thousand by December 31, 2021, representing significant growth in the overall financial resource pool.
- Debt to Capital Ratio Analysis
- The debt to capital ratio exhibited a continuous downward trend throughout the observed period. The ratio decreased from 0.26 in 2017 to 0.11 in 2021. This persistent decline reflects a systematic reduction in financial leverage, suggesting that the expansion of the capital base was driven primarily by equity or retained earnings rather than additional debt incurrence.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Debt to Assets
| 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 | — | — | — | — | |
| Elevance Health Inc. | 0.24 | — | — | — | — | |
| Intuitive Surgical Inc. | 0.00 | — | — | — | — | |
| Medtronic PLC | 0.28 | — | — | — | — | |
| UnitedHealth Group Inc. | 0.22 | — | — | — | — | |
| Debt to Assets, Sector | ||||||
| Health Care Equipment & Services | 0.23 | — | — | — | — | |
| Debt to Assets, Industry | ||||||
| Health Care | 0.30 | — | — | — | — | |
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.
The solvency profile exhibits a strong positive trend from 2017 to 2021, characterized by a substantial reduction in leverage and a consistent expansion of the asset base.
- Total Debt Trajectory
- A significant reduction in total debt occurred between December 31, 2017, and December 31, 2018, with obligations falling from US$ 1,036,400 thousand to US$ 593,800 thousand. Following this initial decrease, the debt level remained remarkably stable through 2021, showing only marginal incremental changes.
- Asset Growth Patterns
- Following a slight contraction in 2018, total assets entered a period of sustained growth. Assets increased from US$ 5,323,700 thousand in 2018 to US$ 8,502,600 thousand by December 31, 2021, indicating a steady accumulation of resources over the four-year period.
- Debt to Assets Ratio Analysis
- The debt to assets ratio demonstrates a continuous downward trend, declining from 0.18 in 2017 to 0.07 in 2021. This improvement is the result of both the initial sharp decrease in total debt and the subsequent consistent growth in total assets. The trend reflects a diminishing reliance on borrowed capital to fund assets, thereby strengthening the overall solvency position and reducing financial risk.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
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 | — | — | — | — | |
| Elevance Health Inc. | 0.25 | — | — | — | — | |
| Intuitive Surgical Inc. | 0.01 | — | — | — | — | |
| Medtronic PLC | 0.29 | — | — | — | — | |
| UnitedHealth Group Inc. | 0.24 | — | — | — | — | |
| Debt to Assets (including Operating Lease Liability), Sector | ||||||
| Health Care Equipment & Services | 0.25 | — | — | — | — | |
| Debt to Assets (including Operating Lease Liability), Industry | ||||||
| Health Care | 0.31 | — | — | — | — | |
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
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.
An analysis of the solvency profile between 2017 and 2021 reveals a progressive strengthening of the balance sheet, characterized by a consistent decline in the debt-to-assets ratio. This ratio decreased from 0.18 in 2017 to 0.08 by the end of 2021, signaling a reduction in the proportion of total assets financed through debt and operating lease liabilities.
- Debt Obligations Trend
- A substantial reduction in total debt occurred between 2017 and 2018, where obligations fell from approximately 1.04 billion USD to 593.8 million USD. Following this initial decrease, debt levels remained relatively stable through 2021, fluctuating within a narrow range between 678.8 million USD and 694.9 million USD.
- Asset Base Expansion
- Following a marginal contraction in 2018, total assets entered a period of sustained growth. Assets increased from 5.32 billion USD in 2018 to 8.50 billion USD in 2021, representing a significant expansion of the resource base over the latter portion of the analyzed period.
- Solvency Ratio Interpretation
- The improvement in the debt-to-assets ratio is attributed to the combination of the initial reduction in debt and the subsequent steady growth of total assets. The transition from a ratio of 0.18 to 0.08 indicates a lowered financial risk profile and a strengthened capacity to cover obligations using the asset base.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Financial Leverage
| 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 | — | — | — | — | |
| Elevance Health Inc. | 2.70 | — | — | — | — | |
| Intuitive Surgical Inc. | 1.14 | — | — | — | — | |
| Medtronic PLC | 1.81 | — | — | — | — | |
| UnitedHealth Group Inc. | 2.96 | — | — | — | — | |
| Financial Leverage, Sector | ||||||
| Health Care Equipment & Services | 2.37 | — | — | — | — | |
| Financial Leverage, Industry | ||||||
| Health Care | 2.69 | — | — | — | — | |
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.
The analysis of solvency ratios from 2017 to 2021 reveals a consistent trend toward deleveraging and a strengthened equity position. While the total asset base expanded significantly over the five-year period, the growth in stockholders' equity outpaced the proportional increase in total liabilities, resulting in a diminished reliance on external financing.
- Financial Leverage Trend
- A sustained decline in the financial leverage ratio is observed, decreasing from 1.93 in 2017 to 1.46 by the end of 2021. This downward trajectory indicates a reduction in financial risk and an increase in the proportion of assets financed through equity rather than debt. A minor fluctuation occurred in 2020, where the ratio rose slightly to 1.58 from 1.56, before continuing its descent in the following year.
- Stockholders' Equity Growth
- Equity demonstrated uninterrupted growth throughout the analyzed period, increasing from US$ 2,956,200 thousand in 2017 to US$ 5,835,900 thousand in 2021. This nearly twofold increase in equity serves as the primary driver for the improved solvency profile and provides a larger capital cushion to absorb potential losses.
- Asset Expansion
- Total assets experienced an overall upward trajectory, growing from US$ 5,695,800 thousand in 2017 to US$ 8,502,600 thousand in 2021. Despite a marginal decrease in assets between 2017 and 2018, the subsequent three years showed consistent growth, indicating an expansion of the operational base supported by a decreasing reliance on leveraged funding.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Interest Coverage
| 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 | — | — | — | — | |
| Elevance Health Inc. | 10.93 | — | — | — | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | |
| Medtronic PLC | 5.21 | — | — | — | — | |
| UnitedHealth Group Inc. | 14.44 | — | — | — | — | |
| Interest Coverage, Sector | ||||||
| Health Care Equipment & Services | 12.30 | — | — | — | — | |
| Interest Coverage, Industry | ||||||
| Health Care | 14.14 | — | — | — | — | |
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.
The solvency analysis between 2017 and 2021 indicates a robust ability to service debt obligations, characterized by a substantial and growing margin of safety.
- Earnings Before Interest and Tax (EBIT) Trends
- Operational earnings exhibited volatility during the first four years, with declines observed in 2018 and 2020. However, a sharp recovery occurred in 2021, where EBIT reached US$ 1,720,400 thousand, representing a significant increase from the 2017 baseline of US$ 1,058,100 thousand.
- Interest Expense Volatility
- Interest expenses peaked in 2018 at US$ 29,900 thousand before trending generally downward. By 2021, the expense was reduced to US$ 18,400 thousand, reflecting a lower cost of debt relative to the operational scale of the entity.
- Interest Coverage Ratio Analysis
- The interest coverage ratio fluctuated but remained at high levels throughout the period. After reaching a minimum of 26.46 in 2018, the ratio expanded consistently, culminating in a value of 93.50 by 2021. This progression indicates that the capacity to cover interest payments from operating profits grew more than threefold between 2018 and 2021, suggesting negligible risk regarding the fulfillment of interest obligations.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Fixed Charge Coverage
| 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 | — | — | — | — | |
| Elevance Health Inc. | 8.48 | — | — | — | — | |
| Intuitive Surgical Inc. | 93.66 | — | — | — | — | |
| Medtronic PLC | 4.31 | — | — | — | — | |
| UnitedHealth Group Inc. | 8.80 | — | — | — | — | |
| Fixed Charge Coverage, Sector | ||||||
| Health Care Equipment & Services | 8.36 | — | — | — | — | |
| Fixed Charge Coverage, Industry | ||||||
| Health Care | 10.48 | — | — | — | — | |
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
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.
The analysis of solvency metrics between 2017 and 2021 indicates a strong and improving capacity to meet fixed financial obligations. While there was volatility in earnings and coverage ratios during the middle of the period, the trend concluded with a significant strengthening of the solvency position by the end of 2021.
- Earnings Before Fixed Charges and Tax
- Earnings exhibited a fluctuating pattern, starting at $1,085,400 thousand in 2017 and decreasing to $818,300 thousand in 2018. A recovery followed in 2019, reaching $1,215,100 thousand, before another decline to $963,000 thousand in 2020. However, 2021 marked a substantial increase, with earnings peaking at $1,750,100 thousand, representing a significant expansion in the capital available to cover fixed costs.
- Fixed Charges
- Fixed charges remained relatively stable throughout the five-year period. After a peak of $56,900 thousand in 2018, these expenses trended slightly downward, reaching a low of $46,300 thousand in 2020, before settling at $48,100 thousand in 2021. The relative constancy of these charges suggests a controlled cost structure regarding fixed obligations.
- Fixed Charge Coverage Ratio
- The coverage ratio mirrored the volatility of earnings, dropping from 21.49 in 2017 to a period low of 14.38 in 2018. The ratio subsequently recovered to 25.00 in 2019 and experienced a slight contraction to 20.80 in 2020. By December 31, 2021, the ratio reached a peak of 36.38, indicating that earnings were more than 36 times the amount of fixed charges, thereby reflecting a very low risk of default on fixed obligations.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?