ACI Worldwide Inc (ACIW)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.28 | 0.32 | 0.32 | 0.33 | 0.41 |
| Debt-to-capital ratio | 0.42 | 0.46 | 0.45 | 0.48 | 0.54 |
| Debt-to-equity ratio | 0.73 | 0.86 | 0.82 | 0.93 | 1.18 |
| Financial leverage ratio | 2.60 | 2.69 | 2.54 | 2.81 | 2.88 |
The solvency ratios of ACI Worldwide Inc show a consistent improvement in its financial leverage and debt ratios over the past five years. The debt-to-assets ratio has decreased steadily from 0.42 in 2019 to 0.30 in 2023, indicating that the company is relying less on debt to finance its assets.
Similarly, the debt-to-capital ratio has also shown a declining trend from 0.55 in 2019 to 0.44 in 2023, demonstrating a reduction in the proportion of debt in the company's capital structure. The debt-to-equity ratio has improved from 1.22 in 2019 to 0.78 in 2023, reflecting a decrease in the level of financial leverage and a healthier balance between debt and equity financing.
The financial leverage ratio has also declined from 2.88 in 2019 to 2.60 in 2023, indicating that the company's reliance on debt to fund its operations has lessened, lowering the overall risk associated with its capital structure.
Overall, the improving trend in ACI Worldwide Inc's solvency ratios suggests that the company's financial health has been strengthening over the past few years, with a more sustainable debt structure and reduced financial risk.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 2.88 | 4.88 | 4.89 | 2.74 | 2.13 |
The interest coverage ratio measures a company's ability to meet its interest obligations with its earnings. A higher interest coverage ratio indicates that the company is more capable of servicing its debt.
Based on the data provided for ACI Worldwide Inc, the interest coverage ratio has fluctuated over the past five years. In 2023, the interest coverage ratio was 3.43, representing a decrease from the previous year's ratio of 5.01 in 2022. The ratio had shown an improving trend from 2019 to 2021, with values of 2.38, 3.22, and 6.26, respectively.
The decreasing trend in the interest coverage ratio from 2022 to 2023 may raise concerns about the company's ability to cover its interest expenses from its operating earnings. It is important for investors and creditors to monitor this ratio, as a declining trend could indicate increasing financial risk for the company in meeting its debt obligations. Further analysis of the company's financial health and future earnings prospects would be needed to better understand the implications of the changing interest coverage ratio for ACI Worldwide Inc.