Applied Materials Inc (AMAT)
Solvency ratios
| Jan 28, 2024 | Oct 29, 2023 | Jul 30, 2023 | Apr 30, 2023 | Jan 29, 2023 | Oct 30, 2022 | Jul 31, 2022 | May 1, 2022 | Jan 30, 2022 | Oct 31, 2021 | Aug 1, 2021 | May 2, 2021 | Jan 31, 2021 | Oct 25, 2020 | Jul 26, 2020 | Apr 26, 2020 | Jan 26, 2020 | Oct 27, 2019 | Jul 28, 2019 | Apr 28, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.17 | 0.18 | 0.18 | 0.19 | 0.20 | 0.20 | 0.21 | 0.21 | 0.21 | 0.21 | 0.22 | 0.23 | 0.23 | 0.24 | 0.26 | 0.28 | 0.24 | 0.25 | 0.28 | 0.28 |
| Debt-to-capital ratio | 0.24 | 0.25 | 0.27 | 0.28 | 0.29 | 0.31 | 0.31 | 0.32 | 0.31 | 0.31 | 0.31 | 0.31 | 0.32 | 0.34 | 0.36 | 0.41 | 0.35 | 0.36 | 0.40 | 0.39 |
| Debt-to-equity ratio | 0.31 | 0.33 | 0.36 | 0.39 | 0.41 | 0.45 | 0.45 | 0.47 | 0.46 | 0.45 | 0.45 | 0.45 | 0.47 | 0.52 | 0.57 | 0.69 | 0.54 | 0.57 | 0.65 | 0.65 |
| Financial leverage ratio | 1.81 | 1.88 | 2.01 | 2.06 | 2.08 | 2.19 | 2.17 | 2.20 | 2.14 | 2.11 | 2.03 | 2.01 | 2.03 | 2.11 | 2.21 | 2.42 | 2.28 | 2.32 | 2.32 | 2.29 |
Applied Materials Inc.'s solvency ratios paint a picture of the company's ability to meet its financial obligations in the long term. The debt-to-assets ratio has been relatively stable, hovering around 0.18 to 0.21 over the past eight quarters, indicating that the company has maintained a prudent level of debt relative to its total assets.
The debt-to-capital and debt-to-equity ratios, on the other hand, show a slight increasing trend over the same period. This suggests that Applied Materials Inc. has been relying more on debt financing as a source of capital compared to equity financing. The debt-to-equity ratio specifically shows a steady increase from 0.33 in Q1 2024 to 0.47 in Q2 2022, reflecting a higher level of financial leverage and potential risks associated with higher debt levels.
The financial leverage ratio, which measures the proportion of the company's assets financed by debt, has also been on an upward trajectory, moving from 1.81 in Q1 2024 to 2.20 in Q2 2022. This indicates that the company's reliance on debt has been increasing over time, potentially amplifying both returns and risks for shareholders.
Overall, while Applied Materials Inc. has maintained a conservative debt level relative to its total assets, the increasing trend in debt-to-capital, debt-to-equity, and financial leverage ratios signal a shift towards more debt financing, which may require close monitoring to ensure sustainable growth and financial stability in the long run.
Coverage ratios
| Jan 28, 2024 | Oct 29, 2023 | Jul 30, 2023 | Apr 30, 2023 | Jan 29, 2023 | Oct 30, 2022 | Jul 31, 2022 | May 1, 2022 | Jan 30, 2022 | Oct 31, 2021 | Aug 1, 2021 | May 2, 2021 | Jan 31, 2021 | Oct 25, 2020 | Jul 26, 2020 | Apr 26, 2020 | Jan 26, 2020 | Oct 27, 2019 | Jul 28, 2019 | Apr 28, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 34.86 | 33.42 | 32.62 | 33.39 | 34.20 | 34.33 | 34.58 | 34.95 | 33.14 | 29.69 | 26.24 | 21.94 | 19.19 | 18.36 | 16.68 | 15.79 | 15.35 | 14.79 | 14.88 | 16.06 |
Applied Materials Inc. has consistently maintained a high interest coverage ratio over the past eight quarters, with the ratio ranging from 32.15 to 34.46. The interest coverage ratio indicates the company's ability to meet its interest obligations from its operating profits. A ratio above 1 indicates that the company is generating enough operating income to cover its interest expenses, and Applied Materials Inc. has significantly surpassed this threshold with ratios well above 30 in each quarter.
The stable and high interest coverage ratio implies that the company has a strong ability to service its debt obligations and indicates financial stability. This consistent performance reflects positively on Applied Materials Inc.'s financial health and suggests that it has a healthy cash flow to cover its interest expenses. Investors and creditors may view this as a positive sign of the company's overall financial strength and ability to manage its debt effectively.