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
Shockwave Medical 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).
The solvency profile of Shockwave Medical Inc. underwent a significant transformation between 2019 and 2023, transitioning from a period of minimal leverage to a substantially more debt-reliant capital structure.
- Leverage and Capitalization Trends
- Between 2019 and 2022, the company maintained a conservative leverage position. The debt-to-equity ratio remained stable, fluctuating minimally between 0.05 and 0.07, while the debt-to-assets ratio showed a slight downward trend, reaching 0.04 by the end of 2022. However, a sharp increase in leverage occurred in 2023, with the debt-to-equity ratio rising to 1.09 and the debt-to-assets ratio climbing to 0.47. This shift is further reflected in the financial leverage ratio, which rose to 2.34 in 2023 after spending four years consistently between 1.20 and 1.43.
- Coverage Capacity
- A critical pivot in the ability to service debt is observed starting in 2022. From 2019 to 2021, interest coverage and fixed charge coverage ratios were negative, indicating that the company's earnings were insufficient to cover its financial obligations. In 2022, there was a dramatic reversal, with interest coverage jumping to 65.07 and fixed charge coverage to 19.44. Although these ratios declined in 2023—to 26.24 and 15.51, respectively—they remained firmly positive, suggesting that despite the significant increase in total debt, the company's operational capacity to service that debt has improved substantially compared to the 2019-2021 period.
- Impact of Lease Liabilities
- The inclusion of operating lease liabilities consistently elevated the solvency ratios across all periods. The gap between standard debt ratios and those including lease liabilities remained relatively narrow from 2019 to 2022, but mirrored the sharp increase seen in general debt levels during 2023, with the debt-to-equity ratio including leases reaching 1.15.
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Debt to Equity
Shockwave Medical 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 portion | —) | —) | 5,500) | 3,300) | 6,667) | |
| Convertible debt, noncurrent portion | 731,863) | —) | —) | —) | —) | |
| Debt, noncurrent portion | —) | 24,198) | 11,630) | 13,319) | 7,152) | |
| Total debt | 731,863) | 24,198) | 17,130) | 16,619) | 13,819) | |
| Stockholders’ equity | 668,677) | 511,316) | 241,830) | 225,654) | 192,653) | |
| Solvency Ratio | ||||||
| Debt to equity1 | 1.09 | 0.05 | 0.07 | 0.07 | 0.07 | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| Abbott Laboratories | 0.38 | 0.46 | 0.50 | — | — | |
| Elevance Health Inc. | 0.64 | 0.66 | 0.64 | — | — | |
| Intuitive Surgical Inc. | 0.00 | 0.00 | 0.00 | — | — | |
| Medtronic PLC | 0.47 | 0.46 | 0.51 | — | — | |
| UnitedHealth Group Inc. | 0.70 | 0.74 | 0.64 | — | — | |
| Debt to Equity, Sector | ||||||
| Health Care Equipment & Services | 0.55 | 0.57 | 0.55 | — | — | |
| Debt to Equity, Industry | ||||||
| Health Care | 0.82 | 0.72 | 0.80 | — | — | |
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
= 731,863 ÷ 668,677 = 1.09
2 Click competitor name to see calculations.
The debt to equity ratio exhibited a period of stability followed by a significant increase over the observed timeframe. From 2019 through 2022, the ratio remained relatively consistent, indicating a stable capital structure. However, a substantial shift occurred in 2023, resulting in a markedly higher ratio.
- Debt to Equity Ratio - Trend Analysis
- The debt to equity ratio was consistently low between 2019 and 2022, registering at 0.07 for both 2019 and 2020, then decreasing slightly to 0.05 in 2022. This suggests the company historically financed its operations primarily through equity. A considerable increase is then observed in 2023, with the ratio rising to 1.09. This indicates a substantial increase in debt relative to equity during that year.
- Debt to Equity Ratio - Magnitude of Change
- The increase from 0.05 in 2022 to 1.09 in 2023 represents a significant change in the company’s financial leverage. This suggests a strategic decision to increase debt financing, potentially for expansion, acquisitions, or other capital investments. The magnitude of this change warrants further investigation into the underlying reasons and associated risks.
- Debt to Equity Ratio - Implications
- A higher debt to equity ratio generally implies greater financial risk, as a larger proportion of the company’s assets are financed by debt. While debt can amplify returns, it also increases the potential for financial distress if the company is unable to meet its debt obligations. The substantial increase in 2023 suggests the company has taken on considerably more risk, and its ability to service this debt will be a key factor to monitor.
The observed trend suggests a deliberate shift in the company’s financing strategy in 2023. The implications of this shift on the company’s financial health and future performance require further scrutiny.
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Debt to Equity (including Operating Lease Liability)
Shockwave Medical 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 portion | —) | —) | 5,500) | 3,300) | 6,667) | |
| Convertible debt, noncurrent portion | 731,863) | —) | —) | —) | —) | |
| Debt, noncurrent portion | —) | 24,198) | 11,630) | 13,319) | 7,152) | |
| Total debt | 731,863) | 24,198) | 17,130) | 16,619) | 13,819) | |
| Operating lease liability, current portion | 3,641) | 1,278) | 1,738) | 873) | 774) | |
| Operating lease liability, noncurrent portion | 35,103) | 34,928) | 28,321) | 7,488) | 8,125) | |
| Total debt (including operating lease liability) | 770,607) | 60,404) | 47,189) | 24,980) | 22,718) | |
| Stockholders’ equity | 668,677) | 511,316) | 241,830) | 225,654) | 192,653) | |
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | 1.15 | 0.12 | 0.20 | 0.11 | 0.12 | |
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| Abbott Laboratories | 0.41 | 0.49 | 0.54 | — | — | |
| Elevance Health Inc. | 0.66 | 0.69 | 0.67 | — | — | |
| Intuitive Surgical Inc. | 0.01 | 0.01 | 0.01 | — | — | |
| Medtronic PLC | 0.49 | 0.48 | 0.53 | — | — | |
| UnitedHealth Group Inc. | 0.76 | 0.80 | 0.70 | — | — | |
| Debt to Equity (including Operating Lease Liability), Sector | ||||||
| Health Care Equipment & Services | 0.58 | 0.61 | 0.58 | — | — | |
| Debt to Equity (including Operating Lease Liability), Industry | ||||||
| Health Care | 0.85 | 0.76 | 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 (including operating lease liability) = Total debt (including operating lease liability) ÷ Stockholders’ equity
= 770,607 ÷ 668,677 = 1.15
2 Click competitor name to see calculations.
Between 2019 and 2022, the company maintained a conservative capital structure with low reliance on borrowed funds. This period was characterized by stable solvency ratios and a steady expansion of the equity base. However, the fiscal year 2023 represents a fundamental shift in the company's financial leverage, as total debt obligations increased exponentially, altering the overall solvency profile.
- Total Debt Trends
- Total debt, including operating lease liabilities, exhibited modest growth from December 31, 2019, through December 31, 2022, rising from 22,718 thousand US$ to 60,404 thousand US$. A significant inflection point occurred in 2023, where total debt surged to 770,607 thousand US$, representing a substantial increase in the company's total liabilities.
- Stockholders' Equity Growth
- Stockholders' equity demonstrated consistent upward momentum throughout the analyzed period. Equity grew from 192,653 thousand US$ in 2019 to 668,677 thousand US$ by the end of 2023. A notable acceleration in equity accumulation occurred between 2021 and 2022, where the balance more than doubled from 241,830 thousand US$ to 511,316 thousand US$.
- Debt to Equity Ratio Analysis
- The debt to equity ratio remained low and stable from 2019 to 2022, fluctuating within a narrow range between 0.11 and 0.20, indicating that the company was primarily funded through equity. In 2023, the ratio shifted dramatically to 1.15. This indicates that total debt now exceeds stockholders' equity, signaling a transition toward a more highly leveraged financial position and an increase in financial risk associated with solvency.
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Debt to Capital
Shockwave Medical Inc., debt to capital calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Debt, current portion | —) | —) | 5,500) | 3,300) | 6,667) | |
| Convertible debt, noncurrent portion | 731,863) | —) | —) | —) | —) | |
| Debt, noncurrent portion | —) | 24,198) | 11,630) | 13,319) | 7,152) | |
| Total debt | 731,863) | 24,198) | 17,130) | 16,619) | 13,819) | |
| Stockholders’ equity | 668,677) | 511,316) | 241,830) | 225,654) | 192,653) | |
| Total capital | 1,400,540) | 535,514) | 258,960) | 242,273) | 206,472) | |
| Solvency Ratio | ||||||
| Debt to capital1 | 0.52 | 0.05 | 0.07 | 0.07 | 0.07 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| Abbott Laboratories | 0.28 | 0.31 | 0.34 | — | — | |
| Elevance Health Inc. | 0.39 | 0.40 | 0.39 | — | — | |
| Intuitive Surgical Inc. | 0.00 | 0.00 | 0.00 | — | — | |
| Medtronic PLC | 0.32 | 0.31 | 0.34 | — | — | |
| UnitedHealth Group Inc. | 0.41 | 0.43 | 0.39 | — | — | |
| Debt to Capital, Sector | ||||||
| Health Care Equipment & Services | 0.35 | 0.36 | 0.35 | — | — | |
| Debt to Capital, Industry | ||||||
| Health Care | 0.45 | 0.42 | 0.44 | — | — | |
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
= 731,863 ÷ 1,400,540 = 0.52
2 Click competitor name to see calculations.
The company's solvency profile underwent a significant transformation between 2019 and 2023. For the majority of the period, the capital structure remained highly conservative, characterized by minimal reliance on debt. However, the fiscal year ending December 31, 2023, marks a pivot toward a substantially more leveraged financial position.
- Total Debt Trends
- From 2019 through 2022, total debt exhibited modest growth, increasing from 13,819 thousand US$ to 24,198 thousand US$. A dramatic surge occurred in 2023, with total debt rising to 731,863 thousand US$, representing an increase of approximately 3,012% over the previous year.
- Total Capital Expansion
- Total capital grew steadily from 206,472 thousand US$ in 2019 to 535,514 thousand US$ in 2022. In 2023, total capital expanded further to 1,400,540 thousand US$. While total capital increased significantly, the pace of growth was outstripped by the increase in total debt during the final year.
- Debt to Capital Ratio Analysis
- The debt to capital ratio remained stable at 0.07 from 2019 to 2021, with a slight decrease to 0.05 in 2022, indicating a period of very low financial leverage. This trend reversed sharply in 2023, as the ratio climbed to 0.52. This shift indicates that debt now constitutes over half of the company's total capital, reflecting a fundamental change in the funding strategy and an increase in solvency risk relative to historical levels.
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Debt to Capital (including Operating Lease Liability)
Shockwave Medical Inc., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Debt, current portion | —) | —) | 5,500) | 3,300) | 6,667) | |
| Convertible debt, noncurrent portion | 731,863) | —) | —) | —) | —) | |
| Debt, noncurrent portion | —) | 24,198) | 11,630) | 13,319) | 7,152) | |
| Total debt | 731,863) | 24,198) | 17,130) | 16,619) | 13,819) | |
| Operating lease liability, current portion | 3,641) | 1,278) | 1,738) | 873) | 774) | |
| Operating lease liability, noncurrent portion | 35,103) | 34,928) | 28,321) | 7,488) | 8,125) | |
| Total debt (including operating lease liability) | 770,607) | 60,404) | 47,189) | 24,980) | 22,718) | |
| Stockholders’ equity | 668,677) | 511,316) | 241,830) | 225,654) | 192,653) | |
| Total capital (including operating lease liability) | 1,439,284) | 571,720) | 289,019) | 250,634) | 215,371) | |
| Solvency Ratio | ||||||
| Debt to capital (including operating lease liability)1 | 0.54 | 0.11 | 0.16 | 0.10 | 0.11 | |
| Benchmarks | ||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||
| Abbott Laboratories | 0.29 | 0.33 | 0.35 | — | — | |
| Elevance Health Inc. | 0.40 | 0.41 | 0.40 | — | — | |
| Intuitive Surgical Inc. | 0.01 | 0.01 | 0.01 | — | — | |
| Medtronic PLC | 0.33 | 0.32 | 0.35 | — | — | |
| UnitedHealth Group Inc. | 0.43 | 0.45 | 0.41 | — | — | |
| Debt to Capital (including Operating Lease Liability), Sector | ||||||
| Health Care Equipment & Services | 0.37 | 0.38 | 0.37 | — | — | |
| Debt to Capital (including Operating Lease Liability), Industry | ||||||
| Health Care | 0.46 | 0.43 | 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 (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 770,607 ÷ 1,439,284 = 0.54
2 Click competitor name to see calculations.
The solvency profile experienced a period of relative stability from 2019 through 2022, followed by a substantial increase in leverage in 2023. For the majority of the observed period, the organization maintained a conservative capital structure with minimal reliance on debt, though the most recent fiscal year indicates a significant strategic shift in financing.
- Total Debt Trends
- From 2019 to 2022, total debt, including operating lease liabilities, grew at a gradual pace, increasing from 22.7 million USD to 60.4 million USD. A sharp escalation occurred in 2023, with total debt rising to 770.6 million USD, marking a nearly 1,175% increase over the previous year's balance.
- Total Capital Expansion
- Total capital demonstrated a consistent upward trajectory, rising from 215.4 million USD in 2019 to 571.7 million USD in 2022. In 2023, total capital expanded significantly to 1.44 billion USD. While the capital base grew substantially, the growth rate was outpaced by the increase in debt obligations during the final year.
- Debt to Capital Ratio Analysis
- The debt to capital ratio remained low and stable between 2019 and 2022, fluctuating within a narrow range of 0.10 to 0.16, which suggests a capital structure predominantly funded by equity. In 2023, this ratio surged to 0.54, indicating that debt now comprises more than half of the total capital, reflecting a heightened solvency risk and a fundamental change in the organization's leverage position.
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Debt to Assets
Shockwave Medical 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 portion | —) | —) | 5,500) | 3,300) | 6,667) | |
| Convertible debt, noncurrent portion | 731,863) | —) | —) | —) | —) | |
| Debt, noncurrent portion | —) | 24,198) | 11,630) | 13,319) | 7,152) | |
| Total debt | 731,863) | 24,198) | 17,130) | 16,619) | 13,819) | |
| Total assets | 1,566,563) | 646,089) | 345,682) | 272,042) | 231,938) | |
| Solvency Ratio | ||||||
| Debt to assets1 | 0.47 | 0.04 | 0.05 | 0.06 | 0.06 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| Abbott Laboratories | 0.20 | 0.23 | 0.24 | — | — | |
| Elevance Health Inc. | 0.23 | 0.23 | 0.24 | — | — | |
| Intuitive Surgical Inc. | 0.00 | 0.00 | 0.00 | — | — | |
| Medtronic PLC | 0.27 | 0.27 | 0.28 | — | — | |
| UnitedHealth Group Inc. | 0.23 | 0.23 | 0.22 | — | — | |
| Debt to Assets, Sector | ||||||
| Health Care Equipment & Services | 0.23 | 0.23 | 0.23 | — | — | |
| Debt to Assets, Industry | ||||||
| Health Care | 0.30 | 0.28 | 0.30 | — | — | |
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
= 731,863 ÷ 1,566,563 = 0.47
2 Click competitor name to see calculations.
An analysis of the solvency position from 2019 through 2023 reveals a period of low leverage followed by a substantial shift in capital structure. Between 2019 and 2022, the organization maintained a conservative financial profile, with the debt to assets ratio remaining minimal and exhibiting a slight downward trend.
- Asset and Debt Trends
- Total assets demonstrated consistent growth from 2019 to 2022, increasing from 231.9 million to 646.1 million US dollars. A significant acceleration occurred in 2023, with assets expanding to 1.57 billion US dollars. During the same initial period, total debt remained relatively stable, growing modestly from 13.8 million to 24.2 million US dollars. However, in 2023, total debt increased sharply to 731.9 million US dollars.
- Debt to Assets Ratio Interpretation
- The debt to assets ratio remained highly stable between 0.04 and 0.06 from 2019 to 2022, indicating that the vast majority of assets were financed through equity or internal cash flows. In 2023, the ratio rose to 0.47, representing a significant increase in financial leverage. This shift indicates that debt now finances approximately 47% of the total asset base, a stark contrast to the leverage levels observed in previous years.
The data indicates a strategic pivot in 2023, characterized by a simultaneous and massive expansion of both the asset base and total liabilities. This transition marks a departure from a low-debt strategy toward a more leveraged capital structure.
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Debt to Assets (including Operating Lease Liability)
Shockwave Medical 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 portion | —) | —) | 5,500) | 3,300) | 6,667) | |
| Convertible debt, noncurrent portion | 731,863) | —) | —) | —) | —) | |
| Debt, noncurrent portion | —) | 24,198) | 11,630) | 13,319) | 7,152) | |
| Total debt | 731,863) | 24,198) | 17,130) | 16,619) | 13,819) | |
| Operating lease liability, current portion | 3,641) | 1,278) | 1,738) | 873) | 774) | |
| Operating lease liability, noncurrent portion | 35,103) | 34,928) | 28,321) | 7,488) | 8,125) | |
| Total debt (including operating lease liability) | 770,607) | 60,404) | 47,189) | 24,980) | 22,718) | |
| Total assets | 1,566,563) | 646,089) | 345,682) | 272,042) | 231,938) | |
| Solvency Ratio | ||||||
| Debt to assets (including operating lease liability)1 | 0.49 | 0.09 | 0.14 | 0.09 | 0.10 | |
| Benchmarks | ||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||
| Abbott Laboratories | 0.22 | 0.24 | 0.26 | — | — | |
| Elevance Health Inc. | 0.24 | 0.24 | 0.25 | — | — | |
| Intuitive Surgical Inc. | 0.01 | 0.01 | 0.01 | — | — | |
| Medtronic PLC | 0.28 | 0.27 | 0.29 | — | — | |
| UnitedHealth Group Inc. | 0.25 | 0.25 | 0.24 | — | — | |
| Debt to Assets (including Operating Lease Liability), Sector | ||||||
| Health Care Equipment & Services | 0.24 | 0.25 | 0.25 | — | — | |
| Debt to Assets (including Operating Lease Liability), Industry | ||||||
| Health Care | 0.32 | 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
= 770,607 ÷ 1,566,563 = 0.49
2 Click competitor name to see calculations.
The solvency profile demonstrates a period of relative stability followed by a significant shift in capital structure during the final observed period. Between 2019 and 2022, a conservative leverage position was maintained, with the debt to assets ratio remaining consistently low.
- Debt Accumulation Trends
- Total debt, including operating lease liabilities, experienced moderate growth from 2019 through 2022, increasing from 22,718 thousand to 60,404 thousand. A substantial escalation occurred in 2023, where debt rose to 770,607 thousand, representing a sharp departure from previous growth trajectories.
- Asset Base Expansion
- Total assets grew steadily from 231,938 thousand in 2019 to 646,089 thousand in 2022. In 2023, the asset base more than doubled, reaching 1,566,563 thousand, suggesting a period of aggressive expansion or significant capital injection.
- Debt to Assets Ratio Interpretation
- The ratio fluctuated minimally between 0.09 and 0.14 from 2019 to 2022, indicating that liabilities constituted a small fraction of total assets. In 2023, the ratio increased to 0.49, signifying that nearly half of the total assets were financed through debt. This transition indicates a strategic shift toward higher financial leverage to support the expanded asset base.
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Financial Leverage
Shockwave Medical 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 | 1,566,563) | 646,089) | 345,682) | 272,042) | 231,938) | |
| Stockholders’ equity | 668,677) | 511,316) | 241,830) | 225,654) | 192,653) | |
| Solvency Ratio | ||||||
| Financial leverage1 | 2.34 | 1.26 | 1.43 | 1.21 | 1.20 | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| Abbott Laboratories | 1.90 | 2.03 | 2.10 | — | — | |
| Elevance Health Inc. | 2.77 | 2.83 | 2.70 | — | — | |
| Intuitive Surgical Inc. | 1.16 | 1.17 | 1.14 | — | — | |
| Medtronic PLC | 1.77 | 1.73 | 1.81 | — | — | |
| UnitedHealth Group Inc. | 3.08 | 3.16 | 2.96 | — | — | |
| Financial Leverage, Sector | ||||||
| Health Care Equipment & Services | 2.43 | 2.46 | 2.37 | — | — | |
| Financial Leverage, Industry | ||||||
| Health Care | 2.70 | 2.57 | 2.69 | — | — | |
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
= 1,566,563 ÷ 668,677 = 2.34
2 Click competitor name to see calculations.
A substantial expansion in the balance sheet is observed between 2019 and 2023. Total assets grew consistently, accelerating significantly in the final two years to reach US$ 1,566,563 thousand by December 31, 2023. Stockholders' equity also trended upward, increasing from US$ 192,653 thousand in 2019 to US$ 668,677 thousand in 2023, though the rate of asset growth outpaced equity growth in the most recent period.
- Financial Leverage Trend
- The financial leverage ratio remained relatively stable and low from 2019 to 2022, fluctuating within a narrow range between 1.20 and 1.43. This indicates a period of conservative capital structure where assets were primarily funded by equity.
- 2023 Leverage Acceleration
- A sharp increase in financial leverage is noted in 2023, with the ratio rising to 2.34. This represents the highest leverage level in the five-year period analyzed, signaling a fundamental shift in the company's financing strategy.
- Asset-Equity Divergence
- The spike in the 2023 ratio is driven by a disproportionate increase in total assets relative to stockholders' equity. While assets more than doubled between 2022 and 2023, equity grew at a significantly slower pace, implying a substantial increase in total liabilities during the fiscal year.
The observed pattern suggests that the company transitioned from a low-leverage position to a more aggressive financing posture by the end of 2023. The increase in the financial leverage ratio to 2.34 indicates a higher reliance on debt or other liabilities to fund asset acquisition and operational expansion.
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Interest Coverage
Shockwave Medical 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 (loss) | 147,278) | 215,996) | (9,136) | (65,699) | (51,109) | |
| Add: Income tax expense | 27,003) | (95,168) | 301) | 80) | 62) | |
| Add: Interest expense | 6,905) | 1,886) | 1,096) | 1,212) | 944) | |
| Earnings before interest and tax (EBIT) | 181,186) | 122,714) | (7,739) | (64,407) | (50,103) | |
| Solvency Ratio | ||||||
| Interest coverage1 | 26.24 | 65.07 | -7.06 | -53.14 | -53.08 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| Abbott Laboratories | 11.46 | 15.89 | 16.41 | — | — | |
| Elevance Health Inc. | 8.49 | 10.13 | 10.93 | — | — | |
| Intuitive Surgical Inc. | — | — | — | — | — | |
| Medtronic PLC | 9.43 | 10.98 | 5.21 | — | — | |
| UnitedHealth Group Inc. | 9.97 | 13.59 | 14.44 | — | — | |
| Interest Coverage, Sector | ||||||
| Health Care Equipment & Services | 10.16 | 13.22 | 12.30 | — | — | |
| Interest Coverage, Industry | ||||||
| Health Care | 7.51 | 14.75 | 14.14 | — | — | |
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
= 181,186 ÷ 6,905 = 26.24
2 Click competitor name to see calculations.
A significant transition in operational solvency is evident over the five-year period, characterized by a shift from operational losses to a capacity to comfortably cover interest obligations.
- Earnings Before Interest and Tax (EBIT)
- Operational losses were recorded from 2019 through 2021, with the most substantial deficit occurring in 2020 at -64.4 million US$. A critical inflection point occurred in 2022, as EBIT shifted to a positive 122.7 million US$, followed by further growth to 181.2 million US$ in 2023. This progression demonstrates a strong recovery in operational profitability.
- Interest Expense
- Interest costs remained relatively low and stable between 2019 and 2022, ranging from approximately 0.9 million to 1.9 million US$. However, a sharp increase is observed in 2023, where expenses rose to 6.9 million US$, indicating a significant escalation in the cost of servicing debt.
- Interest Coverage Ratio
- The interest coverage ratio remained negative from 2019 to 2021, confirming that operational earnings were insufficient to cover interest payments. A substantial improvement occurred in 2022, with the ratio peaking at 65.07. In 2023, the ratio moderated to 26.24; while this represents a decline from the previous year, the decrease is primarily attributable to the surge in interest expenses rather than a decline in earnings. The current ratio remains well above the threshold typically required to ensure solvency, indicating a strong ability to meet interest obligations from operating profits.
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Fixed Charge Coverage
Shockwave Medical 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 (loss) | 147,278) | 215,996) | (9,136) | (65,699) | (51,109) | |
| Add: Income tax expense | 27,003) | (95,168) | 301) | 80) | 62) | |
| Add: Interest expense | 6,905) | 1,886) | 1,096) | 1,212) | 944) | |
| Earnings before interest and tax (EBIT) | 181,186) | 122,714) | (7,739) | (64,407) | (50,103) | |
| Add: Operating lease cost | 5,110) | 4,667) | 2,891) | 2,208) | 1,200) | |
| Earnings before fixed charges and tax | 186,296) | 127,381) | (4,848) | (62,199) | (48,903) | |
| Interest expense | 6,905) | 1,886) | 1,096) | 1,212) | 944) | |
| Operating lease cost | 5,110) | 4,667) | 2,891) | 2,208) | 1,200) | |
| Fixed charges | 12,015) | 6,553) | 3,987) | 3,420) | 2,144) | |
| Solvency Ratio | ||||||
| Fixed charge coverage1 | 15.51 | 19.44 | -1.22 | -18.19 | -22.81 | |
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors2 | ||||||
| Abbott Laboratories | 7.71 | 10.10 | 10.21 | — | — | |
| Elevance Health Inc. | 7.51 | 8.82 | 8.48 | — | — | |
| Intuitive Surgical Inc. | 74.09 | 63.52 | 93.66 | — | — | |
| Medtronic PLC | 6.90 | 7.79 | 4.31 | — | — | |
| UnitedHealth Group Inc. | 7.27 | 8.77 | 8.80 | — | — | |
| Fixed Charge Coverage, Sector | ||||||
| Health Care Equipment & Services | 7.55 | 9.07 | 8.36 | — | — | |
| Fixed Charge Coverage, Industry | ||||||
| Health Care | 6.08 | 10.95 | 10.48 | — | — | |
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
= 186,296 ÷ 12,015 = 15.51
2 Click competitor name to see calculations.
The solvency profile exhibits a significant transition between 2019 and 2023, moving from a state of operational deficiency to a position of strong financial coverage. This period is characterized by a reversal of negative earnings and a subsequent stabilization of the ability to meet fixed financial obligations.
- Earnings Before Fixed Charges and Tax
- A profound recovery in earnings is observed. Initial losses of US$ 48.9 million in 2019 and US$ 62.2 million in 2020 were followed by a narrowing of losses in 2021 to US$ 4.8 million. A pivot to profitability occurred in 2022, with earnings reaching US$ 127.4 million, and further increasing to US$ 186.3 million by the end of 2023.
- Fixed Charges Trend
- Fixed charges have demonstrated a consistent upward trend over the five-year period. Costs increased from US$ 2.1 million in 2019 to US$ 12.0 million in 2023. While the absolute value of these obligations expanded, the rate of increase remained manageable relative to the growth in operational earnings.
- Fixed Charge Coverage Ratio
- The coverage ratio reflects a dramatic shift in solvency risk. Between 2019 and 2021, the ratio remained negative, indicating an inability to cover fixed charges through earnings. A substantial improvement was realized in 2022 as the ratio shifted to 19.44. Although the ratio moderated to 15.51 in 2023, it remains at a level that indicates a high margin of safety and a strong capacity to service fixed obligations.
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