Accenture plc (ACN)
Solvency ratios
| Aug 31, 2024 | Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | Aug 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 1.98 | 1.99 | 2.14 | 2.21 | 2.18 |
The solvency ratios of Accenture plc indicate a consistently low level of indebtedness over the past five years, with debt-to-assets, debt-to-capital, and debt-to-equity ratios all at 0.00. This suggests that the company has been able to finance its operations primarily through equity rather than debt.
However, the financial leverage ratio has shown some fluctuation over the same period, ranging from 1.98 to 2.21. This ratio measures the extent to which the company is using debt to finance its assets, with a higher ratio indicating higher financial leverage. Despite the fluctuations, the financial leverage ratio has generally remained below 2.5, indicating a moderate level of financial risk and leverage.
In conclusion, Accenture plc has maintained a very low level of debt relative to its assets, capital, and equity, highlighting its strong financial position and ability to remain solvent.
Coverage ratios
| Aug 31, 2024 | Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | Aug 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 162.86 | 190.53 | 192.98 | 130.05 | 203.50 |
Interest coverage is a key financial ratio that indicates a company's ability to meet its interest obligations on outstanding debt. In the case of Accenture plc, the interest coverage ratio has shown fluctuations over the past five years.
In August 2024, Accenture's interest coverage ratio stood at 162.86, which signifies that the company generated operating profits almost 163 times higher than its interest expenses for that period. This indicates a healthy cushion and suggests that the company has a strong ability to fulfill its interest payment obligations.
Comparing this with previous years, we observe a declining trend from 2020 to 2021, where the interest coverage ratio dropped significantly to 130.05. This may raise concerns as it indicates a slightly reduced ability to cover interest expenses from operating profits during that period.
However, from 2021 onwards, the ratio has shown an improving trend, reaching 190.53 in 2023 and further increasing to 192.98 in 2022, demonstrating an enhanced ability to meet interest payments. The peak was reached in 2020 with a high interest coverage ratio of 203.50, indicating a very comfortable position in terms of covering interest expenses.
Overall, Accenture plc's interest coverage ratio has been relatively strong over the years, although there was a slight dip in 2021. The recent ratios suggest a solid ability to meet interest obligations, providing a positive outlook for the company's financial health and debt servicing capacity.