Advanced Micro Devices Inc (AMD)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.03 | 0.04 | 0.00 | 0.04 | 0.08 |
| Debt-to-capital ratio | 0.03 | 0.04 | 0.00 | 0.05 | 0.15 |
| Debt-to-equity ratio | 0.03 | 0.05 | 0.00 | 0.06 | 0.17 |
| Financial leverage ratio | 1.21 | 1.23 | 1.66 | 1.54 | 2.13 |
The solvency ratios of Advanced Micro Devices Inc over the five-year period indicate a consistently strong financial position with respect to its debt obligations and capital structure.
The debt-to-assets ratio has been low and stable, ranging from 0.00 to 0.08, which shows that the company has maintained a low level of debt relative to its total assets, indicating a low financial risk and strong asset coverage.
Similarly, the debt-to-capital ratio and debt-to-equity ratio have also remained low and relatively stable over the period, indicating that the company has been able to finance its operations primarily through equity rather than debt. This is a positive signal as it demonstrates a conservative approach to capital structure and financial risk management.
Furthermore, the financial leverage ratio has shown a decreasing trend from 2.13 in 2019 to 1.21 in 2023. This indicates that the company has been gradually reducing its reliance on debt to finance its operations, resulting in a stronger balance sheet and enhanced solvency position.
In conclusion, Advanced Micro Devices Inc's solvency ratios reflect a prudent and sound financial management approach, with a low level of debt relative to its assets and equity, suggesting a stable and secure financial position.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 5.79 | 14.61 | 109.09 | 28.23 | 4.96 |
The interest coverage ratio for Advanced Micro Devices Inc has shown fluctuations over the past five years. In 2023, the interest coverage ratio stood at 5.79, indicating that the company's ability to cover its interest expenses with operating income has decreased compared to the previous year. This decline may raise concerns about the company's ability to service its debts efficiently.
In 2022, Advanced Micro Devices Inc had a significantly higher interest coverage ratio of 14.61, suggesting a strong ability to meet interest obligations from operating earnings. This was a positive indicator of the company's financial health and ability to manage debt effectively.
The interest coverage ratio peaked at 109.09 in 2021, reflecting a very high level of ability to cover interest expenses from operating income. This exceptional ratio indicates a robust financial position and a low risk of default on debt payments.
In 2020, the interest coverage ratio was 28.23, indicating a healthy ability to cover interest costs with operating earnings. This level of coverage suggests a strong financial position and good debt management by the company.
In 2019, the interest coverage ratio was 4.96, showing a lower ability to meet interest obligations from operating income. This could indicate higher financial risk and potential difficulties in servicing debt.
Overall, Advanced Micro Devices Inc's interest coverage ratio has shown variability over the years, with 2021 standing out as a year of exceptionally high coverage, 2023 showing a decline in ability to cover interest expenses, and the other years demonstrating varying levels of coverage and financial health. It is essential for stakeholders to closely monitor changes in the interest coverage ratio to assess the company's financial stability and debt servicing capacity.