Apple Inc (AAPL)
Solvency ratios
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.23 | 0.27 | 0.28 | 0.31 | 0.30 |
| Debt-to-capital ratio | 0.60 | 0.61 | 0.66 | 0.63 | 0.60 |
| Debt-to-equity ratio | 1.51 | 1.53 | 1.95 | 1.73 | 1.51 |
| Financial leverage ratio | 6.41 | 5.67 | 6.96 | 5.56 | 4.96 |
The solvency ratios of Apple Inc indicate the company's ability to meet its long-term financial obligations. Looking at the trends over the past five years, we see improvements in the debt-to-assets ratio, which decreased from 0.31 in 2021 to 0.23 in 2024. This suggests that Apple has been effectively managing its debt levels in relation to its total assets.
Similarly, the debt-to-capital ratio has shown relatively stable performance, hovering around 0.60 to 0.66 over the years. This indicates that Apple has maintained a consistent level of debt in relation to its total capital structure.
On the other hand, the debt-to-equity ratio has fluctuated more significantly, peaking at 1.95 in 2022 before decreasing to 1.51 in 2024. This ratio signifies the proportion of debt financing in relation to equity, and the downward trend suggests a decreased reliance on debt financing compared to equity.
Lastly, the financial leverage ratio, which indicates the extent to which the company uses debt to finance its assets, has shown some fluctuations but generally increasing trend, reaching 6.41 in 2024. This implies that Apple is leveraging its assets more to generate returns for shareholders.
Overall, Apple's solvency ratios demonstrate a balanced approach to managing its debt levels and capital structure, which is crucial for maintaining financial stability and meeting long-term obligations.
Coverage ratios
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | — | 29.92 | 41.64 | 42.29 | 24.35 |
The interest coverage ratio measures a company's ability to meet its interest obligations on outstanding debt. A higher ratio signifies a stronger ability to cover interest payments.
Based on the data provided, Apple Inc's interest coverage ratio has fluctuated over the past five years. In 2020, the ratio was 24.35, indicating that Apple's operating income was 24.35 times greater than its interest expense for that year.
Subsequently, the interest coverage ratio improved significantly in 2021 to 42.29, demonstrating a notable increase in Apple's ability to cover interest expenses. This trend continued in 2022 with a ratio of 41.64, indicating continued strength in the company's financial position.
However, there was a slight decline in the interest coverage ratio in 2023 to 29.92, although it remained relatively high compared to previous years. Unfortunately, the data for 2024 is not available, making it difficult to assess the recent trend.
Overall, Apple Inc has generally shown a strong ability to cover its interest expenses in recent years, with the ratio consistently above industry benchmarks. It is essential for investors and creditors to monitor the interest coverage ratio to assess the company's financial health and ability to meet its debt obligations.