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
Abiomed Inc., solvency ratios
Based on: 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31), 10-K (reporting date: 2019-03-31), 10-K (reporting date: 2018-03-31), 10-K (reporting date: 2017-03-31).
The solvency profile exhibits an extremely conservative capital structure characterized by minimal reliance on external debt and a strong capacity to meet fixed obligations. There is a consistent trend toward reducing leverage, resulting in a financial position primarily funded by equity.
- Debt-to-Equity, Capital, and Asset Ratios
- Debt levels relative to equity, capital, and assets remained exceptionally low throughout the analyzed period. Ratios that stood between 0.03 and 0.04 in 2017 further declined to near-zero levels, ranging from 0.00 to 0.01 between 2020 and 2022. This indicates that debt, including operating lease liabilities, represents a negligible portion of the total capital structure.
- Financial Leverage
- A steady downward trend in financial leverage is observed, moving from 1.22 in 2017 to 1.11 by March 31, 2022. The proximity of this ratio to 1.0 confirms that assets are predominantly financed through equity rather than debt.
- Coverage Ratios
- Fixed charge coverage demonstrated significant volatility, peaking at 532.25 in 2018 before experiencing a downward trend to 59.85 by 2022. While the coverage ratio has declined from its peak, it remains substantially high, indicating that earnings are more than sufficient to cover all fixed financial commitments.
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Debt to Equity
Abiomed Inc., debt to equity calculation, comparison to benchmarks
| Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | Mar 31, 2019 | Mar 31, 2018 | Mar 31, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Current portion of capital lease obligation | —) | —) | —) | —) | —) | 799) | |
| Capital lease obligation, net of current portion | —) | —) | —) | —) | —) | 15,539) | |
| Total debt | —) | —) | —) | —) | —) | 16,338) | |
| Stockholders’ equity | 1,503,326) | 1,329,675) | 1,065,466) | 936,890) | 689,524) | 452,071) | |
| Solvency Ratio | |||||||
| Debt to equity1 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.04 | |
| Benchmarks | |||||||
| Debt to Equity, Competitors2 | |||||||
| Abbott Laboratories | 0.46 | 0.50 | — | — | — | — | |
| Elevance Health Inc. | 0.66 | 0.64 | — | — | — | — | |
| Intuitive Surgical Inc. | 0.00 | 0.00 | — | — | — | — | |
| Medtronic PLC | 0.46 | 0.51 | — | — | — | — | |
| UnitedHealth Group Inc. | 0.74 | 0.64 | — | — | — | — | |
| Debt to Equity, Sector | |||||||
| Health Care Equipment & Services | 0.57 | 0.55 | — | — | — | — | |
| Debt to Equity, Industry | |||||||
| Health Care | 0.72 | 0.80 | — | — | — | — | |
Based on: 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31), 10-K (reporting date: 2019-03-31), 10-K (reporting date: 2018-03-31), 10-K (reporting date: 2017-03-31).
1 2022 Calculation
Debt to equity = Total debt ÷ Stockholders’ equity
= 0 ÷ 1,503,326 = 0.00
2 Click competitor name to see calculations.
The financial position demonstrates a consistent and substantial expansion of stockholders' equity over the observed six-year period, reflecting a significant strengthening of the net asset base.
- Stockholders' Equity Growth
- A strong upward trend is evident in the stockholders' equity, which rose from 452,071 thousand US dollars on March 31, 2017, to 1,503,326 thousand US dollars by March 31, 2022. This trajectory indicates a steady accumulation of retained earnings or capital contributions, resulting in the equity more than tripling over the analyzed timeframe.
- Debt to Equity and Leverage
- As of March 31, 2017, the debt to equity ratio was 0.04, based on total debt of 16,338 thousand US dollars. This extremely low ratio indicates a conservative approach to leverage and a minimal reliance on external borrowing to fund operations. While specific debt figures for subsequent years are not listed, the massive increase in equity suggests a highly solvent financial structure with very low financial risk.
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Debt to Equity (including Operating Lease Liability)
Abiomed Inc., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | Mar 31, 2019 | Mar 31, 2018 | Mar 31, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Current portion of capital lease obligation | —) | —) | —) | —) | —) | 799) | |
| Capital lease obligation, net of current portion | —) | —) | —) | —) | —) | 15,539) | |
| Total debt | —) | —) | —) | —) | —) | 16,338) | |
| Operating lease liabilities in other current liabilities | 2,889) | 2,459) | 3,671) | —) | —) | —) | |
| Operating lease liabilities in other long-term liabilities | 6,618) | 3,657) | 8,549) | —) | —) | —) | |
| Total debt (including operating lease liability) | 9,507) | 6,116) | 12,220) | —) | —) | 16,338) | |
| Stockholders’ equity | 1,503,326) | 1,329,675) | 1,065,466) | 936,890) | 689,524) | 452,071) | |
| Solvency Ratio | |||||||
| Debt to equity (including operating lease liability)1 | 0.01 | 0.00 | 0.01 | 0.00 | 0.00 | 0.04 | |
| Benchmarks | |||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | |||||||
| Abbott Laboratories | 0.49 | 0.54 | — | — | — | — | |
| Elevance Health Inc. | 0.69 | 0.67 | — | — | — | — | |
| Intuitive Surgical Inc. | 0.01 | 0.01 | — | — | — | — | |
| Medtronic PLC | 0.48 | 0.53 | — | — | — | — | |
| UnitedHealth Group Inc. | 0.80 | 0.70 | — | — | — | — | |
| Debt to Equity (including Operating Lease Liability), Sector | |||||||
| Health Care Equipment & Services | 0.61 | 0.58 | — | — | — | — | |
| Debt to Equity (including Operating Lease Liability), Industry | |||||||
| Health Care | 0.76 | 0.83 | — | — | — | — | |
Based on: 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31), 10-K (reporting date: 2019-03-31), 10-K (reporting date: 2018-03-31), 10-K (reporting date: 2017-03-31).
1 2022 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Stockholders’ equity
= 9,507 ÷ 1,503,326 = 0.01
2 Click competitor name to see calculations.
The solvency profile indicates a strong financial position characterized by a minimal reliance on external debt and a substantial expansion of the capital base over the six-year period.
- Stockholders' Equity Growth
- A consistent and significant upward trend in stockholders' equity is observed, rising from 452,071 thousand US dollars on March 31, 2017, to 1,503,326 thousand US dollars by March 31, 2022. This steady growth indicates a robust increase in the company's net worth and internal funding capacity.
- Total Debt Dynamics
- Total debt, including operating lease liabilities, remained low relative to the size of the balance sheet. The total debt decreased from 16,338 thousand US dollars in 2017 to a low of 6,116 thousand US dollars in 2021, with a subsequent modest increase to 9,507 thousand US dollars by 2022.
- Debt to Equity Ratio Analysis
- The debt to equity ratio remained negligible throughout the analyzed period, reflecting a highly conservative approach to leverage. The ratio declined from 0.04 in 2017 to 0.00 in 2021, before settling at 0.01 in 2022. This trend confirms that the company is operating with virtually no financial leverage, as equity overwhelmingly exceeds total liabilities.
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Debt to Capital
Abiomed Inc., debt to capital calculation, comparison to benchmarks
| Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | Mar 31, 2019 | Mar 31, 2018 | Mar 31, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Current portion of capital lease obligation | —) | —) | —) | —) | —) | 799) | |
| Capital lease obligation, net of current portion | —) | —) | —) | —) | —) | 15,539) | |
| Total debt | —) | —) | —) | —) | —) | 16,338) | |
| Stockholders’ equity | 1,503,326) | 1,329,675) | 1,065,466) | 936,890) | 689,524) | 452,071) | |
| Total capital | 1,503,326) | 1,329,675) | 1,065,466) | 936,890) | 689,524) | 468,409) | |
| Solvency Ratio | |||||||
| Debt to capital1 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.03 | |
| Benchmarks | |||||||
| Debt to Capital, Competitors2 | |||||||
| Abbott Laboratories | 0.31 | 0.34 | — | — | — | — | |
| Elevance Health Inc. | 0.40 | 0.39 | — | — | — | — | |
| Intuitive Surgical Inc. | 0.00 | 0.00 | — | — | — | — | |
| Medtronic PLC | 0.31 | 0.34 | — | — | — | — | |
| UnitedHealth Group Inc. | 0.43 | 0.39 | — | — | — | — | |
| Debt to Capital, Sector | |||||||
| Health Care Equipment & Services | 0.36 | 0.35 | — | — | — | — | |
| Debt to Capital, Industry | |||||||
| Health Care | 0.42 | 0.44 | — | — | — | — | |
Based on: 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31), 10-K (reporting date: 2019-03-31), 10-K (reporting date: 2018-03-31), 10-K (reporting date: 2017-03-31).
1 2022 Calculation
Debt to capital = Total debt ÷ Total capital
= 0 ÷ 1,503,326 = 0.00
2 Click competitor name to see calculations.
The analysis of solvency metrics indicates a period of significant capital expansion characterized by a low reliance on debt financing.
- Total Capital Growth
- A consistent and substantial upward trend in total capital is observed from March 31, 2017, to March 31, 2022. The capital base increased from 468,409 thousand US dollars to 1,503,326 thousand US dollars, representing a growth of approximately 221% over the period.
- Debt to Capital Ratio
- As of March 31, 2017, the debt to capital ratio was 0.03, indicating that total debt represented only 3% of the total capital structure. This reflects a highly conservative leverage position at the onset of the analyzed timeframe.
- Solvency and Financial Structure
- The combination of a low initial debt-to-capital ratio and a steady, multi-year increase in total capital suggests a financial strategy focused on equity-funded growth or the accumulation of retained earnings. The expansion of the capital base without a corresponding increase in reported debt indicates a strengthened solvency position and a minimal risk profile regarding long-term debt obligations.
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Debt to Capital (including Operating Lease Liability)
Abiomed Inc., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | Mar 31, 2019 | Mar 31, 2018 | Mar 31, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Current portion of capital lease obligation | —) | —) | —) | —) | —) | 799) | |
| Capital lease obligation, net of current portion | —) | —) | —) | —) | —) | 15,539) | |
| Total debt | —) | —) | —) | —) | —) | 16,338) | |
| Operating lease liabilities in other current liabilities | 2,889) | 2,459) | 3,671) | —) | —) | —) | |
| Operating lease liabilities in other long-term liabilities | 6,618) | 3,657) | 8,549) | —) | —) | —) | |
| Total debt (including operating lease liability) | 9,507) | 6,116) | 12,220) | —) | —) | 16,338) | |
| Stockholders’ equity | 1,503,326) | 1,329,675) | 1,065,466) | 936,890) | 689,524) | 452,071) | |
| Total capital (including operating lease liability) | 1,512,833) | 1,335,791) | 1,077,686) | 936,890) | 689,524) | 468,409) | |
| Solvency Ratio | |||||||
| Debt to capital (including operating lease liability)1 | 0.01 | 0.00 | 0.01 | 0.00 | 0.00 | 0.03 | |
| Benchmarks | |||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | |||||||
| Abbott Laboratories | 0.33 | 0.35 | — | — | — | — | |
| Elevance Health Inc. | 0.41 | 0.40 | — | — | — | — | |
| Intuitive Surgical Inc. | 0.01 | 0.01 | — | — | — | — | |
| Medtronic PLC | 0.32 | 0.35 | — | — | — | — | |
| UnitedHealth Group Inc. | 0.45 | 0.41 | — | — | — | — | |
| Debt to Capital (including Operating Lease Liability), Sector | |||||||
| Health Care Equipment & Services | 0.38 | 0.37 | — | — | — | — | |
| Debt to Capital (including Operating Lease Liability), Industry | |||||||
| Health Care | 0.43 | 0.45 | — | — | — | — | |
Based on: 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31), 10-K (reporting date: 2019-03-31), 10-K (reporting date: 2018-03-31), 10-K (reporting date: 2017-03-31).
1 2022 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 9,507 ÷ 1,512,833 = 0.01
2 Click competitor name to see calculations.
The solvency profile indicates an exceptionally conservative approach to leverage, characterized by a minimal reliance on borrowed funds and a substantial expansion of the overall capital base. Between March 31, 2017, and March 31, 2022, total capital grew consistently from US$ 468.4 million to US$ 1.51 billion, signaling a strong increase in the organization's financial resources.
- Debt to Capital Ratio
- A consistent downward trend is observed in the debt to capital ratio, which decreased from 0.03 in 2017 to 0.00 in 2021, before settling at 0.01 in 2022. This near-zero ratio demonstrates that debt represents a negligible fraction of the total capital structure, indicating a very low risk of insolvency.
- Total Debt Analysis
- Total debt, including operating lease liabilities, shifted from US$ 16.3 million in 2017 to a low of US$ 6.1 million in 2021. While a slight increase to US$ 9.5 million was recorded in 2022, the absolute debt levels remained low throughout the period and did not keep pace with the growth of total capital.
- Capitalization Pattern
- The widening gap between total capital and total debt suggests that growth has been funded primarily through equity or retained earnings rather than through external borrowing. This strategy has resulted in a highly stable solvency position with virtually no exposure to debt-related financial distress.
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Debt to Assets
Abiomed Inc., debt to assets calculation, comparison to benchmarks
| Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | Mar 31, 2019 | Mar 31, 2018 | Mar 31, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Current portion of capital lease obligation | —) | —) | —) | —) | —) | 799) | |
| Capital lease obligation, net of current portion | —) | —) | —) | —) | —) | 15,539) | |
| Total debt | —) | —) | —) | —) | —) | 16,338) | |
| Total assets | 1,673,393) | 1,494,359) | 1,216,462) | 1,054,346) | 786,375) | 550,414) | |
| Solvency Ratio | |||||||
| Debt to assets1 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.03 | |
| Benchmarks | |||||||
| Debt to Assets, Competitors2 | |||||||
| Abbott Laboratories | 0.23 | 0.24 | — | — | — | — | |
| Elevance Health Inc. | 0.23 | 0.24 | — | — | — | — | |
| Intuitive Surgical Inc. | 0.00 | 0.00 | — | — | — | — | |
| Medtronic PLC | 0.27 | 0.28 | — | — | — | — | |
| UnitedHealth Group Inc. | 0.23 | 0.22 | — | — | — | — | |
| Debt to Assets, Sector | |||||||
| Health Care Equipment & Services | 0.23 | 0.23 | — | — | — | — | |
| Debt to Assets, Industry | |||||||
| Health Care | 0.28 | 0.30 | — | — | — | — | |
Based on: 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31), 10-K (reporting date: 2019-03-31), 10-K (reporting date: 2018-03-31), 10-K (reporting date: 2017-03-31).
1 2022 Calculation
Debt to assets = Total debt ÷ Total assets
= 0 ÷ 1,673,393 = 0.00
2 Click competitor name to see calculations.
A consistent upward trajectory in total assets is observed over the six-year period ending March 31, 2022. Total assets grew from 550,414 thousand US dollars in 2017 to 1,673,393 thousand US dollars in 2022, representing a substantial expansion of the organization's resource base.
- Total Asset Growth
- The asset base expanded steadily year-over-year, nearly tripling over the analyzed period. This growth indicates a significant accumulation of resources and a strengthening of the overall balance sheet.
- Debt to Assets Ratio
- As of March 31, 2017, the debt to assets ratio was 0.03. This indicates that only 3% of total assets were financed through debt, reflecting a highly conservative capital structure and minimal reliance on external borrowing at the start of the reporting period.
- Solvency Implications
- The combination of low initial leverage and aggressive asset growth suggests a strong solvency position. Although total debt figures are only provided for 2017, the rapid increase in assets implies that the company's capacity to cover its obligations improved significantly, assuming debt levels did not grow at the same accelerated pace as the assets.
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Debt to Assets (including Operating Lease Liability)
Abiomed Inc., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | Mar 31, 2019 | Mar 31, 2018 | Mar 31, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Current portion of capital lease obligation | —) | —) | —) | —) | —) | 799) | |
| Capital lease obligation, net of current portion | —) | —) | —) | —) | —) | 15,539) | |
| Total debt | —) | —) | —) | —) | —) | 16,338) | |
| Operating lease liabilities in other current liabilities | 2,889) | 2,459) | 3,671) | —) | —) | —) | |
| Operating lease liabilities in other long-term liabilities | 6,618) | 3,657) | 8,549) | —) | —) | —) | |
| Total debt (including operating lease liability) | 9,507) | 6,116) | 12,220) | —) | —) | 16,338) | |
| Total assets | 1,673,393) | 1,494,359) | 1,216,462) | 1,054,346) | 786,375) | 550,414) | |
| Solvency Ratio | |||||||
| Debt to assets (including operating lease liability)1 | 0.01 | 0.00 | 0.01 | 0.00 | 0.00 | 0.03 | |
| Benchmarks | |||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | |||||||
| Abbott Laboratories | 0.24 | 0.26 | — | — | — | — | |
| Elevance Health Inc. | 0.24 | 0.25 | — | — | — | — | |
| Intuitive Surgical Inc. | 0.01 | 0.01 | — | — | — | — | |
| Medtronic PLC | 0.27 | 0.29 | — | — | — | — | |
| UnitedHealth Group Inc. | 0.25 | 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 | 0.29 | 0.31 | — | — | — | — | |
Based on: 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31), 10-K (reporting date: 2019-03-31), 10-K (reporting date: 2018-03-31), 10-K (reporting date: 2017-03-31).
1 2022 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 9,507 ÷ 1,673,393 = 0.01
2 Click competitor name to see calculations.
The company exhibits a strong solvency profile characterized by a consistent and aggressive increase in asset accumulation coupled with a minimal reliance on external debt. The overall financial structure indicates a highly conservative approach to leverage, ensuring a high degree of financial stability.
- Asset Expansion Trend
- A significant and steady upward trajectory in total assets is observed, growing from US$ 550.4 million in March 2017 to US$ 1.67 billion by March 2022. This continuous growth suggests a strong expansion of the balance sheet over the six-year period.
- Debt Level Fluctuations
- Total debt, including operating lease liabilities, showed an overall downward trend for the majority of the period. Obligations decreased from US$ 16.3 million in 2017 to a low of US$ 6.1 million in 2021, followed by a modest increase to US$ 9.5 million in 2022. Despite this recent uptick, debt levels remain low in absolute terms relative to the scale of operations.
- Solvency Ratio Interpretation
- The debt to assets ratio remained consistently low, declining from 0.03 in 2017 to 0.01 in 2020, reaching a negligible 0.00 in 2021, and settling at 0.01 in 2022. This trend indicates that the company is financing its asset growth primarily through equity or internal cash flows rather than through borrowing, resulting in very low financial risk regarding long-term obligations.
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Financial Leverage
Abiomed Inc., financial leverage calculation, comparison to benchmarks
| Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | Mar 31, 2019 | Mar 31, 2018 | Mar 31, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Total assets | 1,673,393) | 1,494,359) | 1,216,462) | 1,054,346) | 786,375) | 550,414) | |
| Stockholders’ equity | 1,503,326) | 1,329,675) | 1,065,466) | 936,890) | 689,524) | 452,071) | |
| Solvency Ratio | |||||||
| Financial leverage1 | 1.11 | 1.12 | 1.14 | 1.13 | 1.14 | 1.22 | |
| Benchmarks | |||||||
| Financial Leverage, Competitors2 | |||||||
| Abbott Laboratories | 2.03 | 2.10 | — | — | — | — | |
| Elevance Health Inc. | 2.83 | 2.70 | — | — | — | — | |
| Intuitive Surgical Inc. | 1.17 | 1.14 | — | — | — | — | |
| Medtronic PLC | 1.73 | 1.81 | — | — | — | — | |
| UnitedHealth Group Inc. | 3.16 | 2.96 | — | — | — | — | |
| Financial Leverage, Sector | |||||||
| Health Care Equipment & Services | 2.46 | 2.37 | — | — | — | — | |
| Financial Leverage, Industry | |||||||
| Health Care | 2.57 | 2.69 | — | — | — | — | |
Based on: 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31), 10-K (reporting date: 2019-03-31), 10-K (reporting date: 2018-03-31), 10-K (reporting date: 2017-03-31).
1 2022 Calculation
Financial leverage = Total assets ÷ Stockholders’ equity
= 1,673,393 ÷ 1,503,326 = 1.11
2 Click competitor name to see calculations.
The company demonstrates a consistent and significant expansion of its balance sheet from 2017 to 2022, characterized by a steady increase in both total assets and stockholders' equity. This growth trajectory is accompanied by a gradual reduction in financial leverage, suggesting a preference for equity-based financing over debt to support operational scaling.
- Asset and Equity Growth
- Total assets increased from 550.4 million US dollars in March 2017 to 1.67 billion US dollars by March 2022. Parallel to this, stockholders' equity rose from 452.1 million US dollars to 1.50 billion US dollars over the same period. The nearly proportional growth between assets and equity indicates a stable capital structure during this expansion phase.
- Financial Leverage Trend
- The financial leverage ratio exhibited a gradual downward trend, decreasing from 1.22 in 2017 to 1.11 in 2022. After an initial decrease between 2017 and 2018, the ratio remained relatively stable, fluctuating minimally between 1.11 and 1.14. This low ratio signifies a minimal reliance on external debt and a strong solvency position, as the company's assets are predominantly funded by equity.
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Interest Coverage
Abiomed Inc., interest coverage calculation, comparison to benchmarks
| Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | Mar 31, 2019 | Mar 31, 2018 | Mar 31, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Net income | 136,505) | 225,525) | 203,009) | 259,016) | 112,170) | 52,116) | |
| Add: Income tax expense | 54,055) | 62,695) | 53,816) | 4,344) | 48,267) | 39,227) | |
| Add: Interest expense | —) | —) | —) | —) | 302) | 354) | |
| Earnings before interest and tax (EBIT) | 190,560) | 288,220) | 256,825) | 263,360) | 160,739) | 91,697) | |
| Solvency Ratio | |||||||
| Interest coverage1 | — | — | — | — | 532.25 | 259.03 | |
| Benchmarks | |||||||
| Interest Coverage, Competitors2 | |||||||
| Abbott Laboratories | 15.89 | 16.41 | — | — | — | — | |
| Elevance Health Inc. | 10.13 | 10.93 | — | — | — | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | — | |
| Medtronic PLC | 10.98 | 5.21 | — | — | — | — | |
| UnitedHealth Group Inc. | 13.59 | 14.44 | — | — | — | — | |
| Interest Coverage, Sector | |||||||
| Health Care Equipment & Services | 13.22 | 12.30 | — | — | — | — | |
| Interest Coverage, Industry | |||||||
| Health Care | 14.75 | 14.14 | — | — | — | — | |
Based on: 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31), 10-K (reporting date: 2019-03-31), 10-K (reporting date: 2018-03-31), 10-K (reporting date: 2017-03-31).
1 2022 Calculation
Interest coverage = EBIT ÷ Interest expense
= 190,560 ÷ 0 = —
2 Click competitor name to see calculations.
The company's operating performance and solvency position are characterized by significant growth in profitability and an exceptionally high capacity to service interest obligations during the periods for which data is available.
- Earnings Before Interest and Tax (EBIT)
- A strong upward trend in operating profitability is observed from 2017 to 2021. EBIT increased from 91,697 thousand US$ in 2017 to 288,220 thousand US$ in 2021. The most rapid expansion occurred between 2017 and 2019. A contraction is noted in 2022, where EBIT decreased to 190,560 thousand US$, although it remains significantly higher than the 2017 baseline.
- Interest Coverage Ratio
- Between 2017 and 2018, the interest coverage ratio experienced a substantial increase, rising from 259.03 to 532.25. This improvement resulted from the combined effect of rising EBIT and a decrease in interest expenses, which fell from 354 thousand US$ to 302 thousand US$. The high value of these ratios suggests a negligible risk of default on interest payments, reflecting a very conservative solvency profile.
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Fixed Charge Coverage
Abiomed Inc., fixed charge coverage calculation, comparison to benchmarks
| Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | Mar 31, 2019 | Mar 31, 2018 | Mar 31, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Net income | 136,505) | 225,525) | 203,009) | 259,016) | 112,170) | 52,116) | |
| Add: Income tax expense | 54,055) | 62,695) | 53,816) | 4,344) | 48,267) | 39,227) | |
| Add: Interest expense | —) | —) | —) | —) | 302) | 354) | |
| Earnings before interest and tax (EBIT) | 190,560) | 288,220) | 256,825) | 263,360) | 160,739) | 91,697) | |
| Add: Operating lease costs | 3,238) | 4,124) | 3,658) | —) | —) | —) | |
| Earnings before fixed charges and tax | 193,798) | 292,344) | 260,483) | 263,360) | 160,739) | 91,697) | |
| Interest expense | —) | —) | —) | —) | 302) | 354) | |
| Operating lease costs | 3,238) | 4,124) | 3,658) | —) | —) | —) | |
| Fixed charges | 3,238) | 4,124) | 3,658) | —) | 302) | 354) | |
| Solvency Ratio | |||||||
| Fixed charge coverage1 | 59.85 | 70.89 | 71.21 | — | 532.25 | 259.03 | |
| Benchmarks | |||||||
| Fixed Charge Coverage, Competitors2 | |||||||
| Abbott Laboratories | 10.10 | 10.21 | — | — | — | — | |
| Elevance Health Inc. | 8.82 | 8.48 | — | — | — | — | |
| Intuitive Surgical Inc. | 63.52 | 93.66 | — | — | — | — | |
| Medtronic PLC | 7.79 | 4.31 | — | — | — | — | |
| UnitedHealth Group Inc. | 8.77 | 8.80 | — | — | — | — | |
| Fixed Charge Coverage, Sector | |||||||
| Health Care Equipment & Services | 9.07 | 8.36 | — | — | — | — | |
| Fixed Charge Coverage, Industry | |||||||
| Health Care | 10.95 | 10.48 | — | — | — | — | |
Based on: 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31), 10-K (reporting date: 2019-03-31), 10-K (reporting date: 2018-03-31), 10-K (reporting date: 2017-03-31).
1 2022 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 193,798 ÷ 3,238 = 59.85
2 Click competitor name to see calculations.
The solvency profile of the organization indicates a period of exceptionally high coverage that shifted significantly between 2018 and 2020. While the capacity to meet fixed obligations remains robust in absolute terms, there is a clear trend of decreasing coverage margins over the six-year period analyzed.
- Earnings before Fixed Charges and Tax
- Earnings exhibited a strong growth trajectory from 2017 through 2021, increasing from 91.697 million to a peak of 292.344 million. However, a significant contraction occurred in 2022, where earnings fell to 193.798 million, marking a decrease of approximately 33% from the previous year.
- Fixed Charge Obligations
- Fixed charges were negligible during 2017 and 2018, remaining below 354 thousand. A substantial increase is observed starting in 2020, with charges rising to 3.658 million and peaking at 4.124 million in 2021. A slight reduction followed in 2022, with charges settling at 3.238 million.
- Fixed Charge Coverage Ratio
- The coverage ratio experienced a sharp decline following a peak of 532.25 in 2018. By 2020, the ratio dropped to 71.21 and continued a gradual descent to 59.85 by 2022. This compression is the result of a simultaneous increase in fixed cost obligations and a reduction in earnings during the final fiscal year of the period.
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