Applied Materials Inc (AMAT)
Solvency ratios
| Oct 27, 2024 | Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Oct 25, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.16 | 0.18 | 0.20 | 0.21 | 0.24 |
| Debt-to-capital ratio | 0.22 | 0.25 | 0.31 | 0.31 | 0.34 |
| Debt-to-equity ratio | 0.29 | 0.33 | 0.45 | 0.45 | 0.52 |
| Financial leverage ratio | 1.81 | 1.88 | 2.19 | 2.11 | 2.11 |
The solvency ratios of Applied Materials Inc demonstrate a favorable trend over the past five years, reflecting the company's ability to meet its long-term financial obligations. The debt-to-assets ratio has consistently decreased from 0.24 in 2020 to 0.16 in 2024, indicating that the company's level of debt relative to its total assets has declined, enhancing its financial stability.
Similarly, the debt-to-capital ratio has shown a downward trend, decreasing from 0.34 in 2020 to 0.22 in 2024. This ratio reveals the proportion of the company's capital that is financed by debt, and the decreasing trend indicates a reduced reliance on debt financing, which can lower financial risk.
The debt-to-equity ratio has also improved progressively, declining from 0.52 in 2020 to 0.29 in 2024. This ratio signifies the extent to which the company is financed by debt relative to equity, and the decreasing values suggest a stronger equity base compared to debt, which is a positive indicator of financial health.
The financial leverage ratio, which provides insight into the proportion of the company's assets that are financed through debt, has remained relatively stable over the past five years. This stability suggests that Applied Materials Inc has maintained a consistent level of financial leverage in utilizing debt to fund its operations and investments.
Overall, the solvency ratios of Applied Materials Inc indicate an improving financial position in terms of managing debt levels and maintaining a solid foundation of equity. This trend reflects positively on the company's ability to meet its long-term financial obligations and indicates a sustainable financial structure.
Coverage ratios
| Oct 27, 2024 | Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Oct 25, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 31.85 | 33.42 | 34.33 | 29.69 | 18.36 |
The interest coverage ratio measures a company's ability to meet interest payments on its outstanding debt. A higher interest coverage ratio indicates a company is more capable of servicing its debt obligations.
Based on the historical data for Applied Materials Inc, its interest coverage ratio has shown a generally increasing trend over the past five years. In the most recent fiscal year ending on October 27, 2024, the company's interest coverage ratio was 31.85, which indicates that Applied Materials Inc earned 31.85 times the interest charges required to cover its interest expenses. This demonstrates a strong ability to meet its interest obligations.
The consistently high interest coverage ratios over the past five years suggest that Applied Materials Inc has been efficiently managing its debt levels and generating sufficient operating income to cover its interest expenses. This trend reflects positively on the company's financial stability and ability to withstand financial downturns that may affect its profitability.
Overall, the improving trend in Applied Materials Inc's interest coverage ratio indicates a strong financial position and the company's ability to meet its debt obligations comfortably.