Advanced Micro Devices Inc (AMD)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.02 | 0.03 | 0.04 | 0.00 | 0.04 |
| Debt-to-capital ratio | 0.03 | 0.03 | 0.04 | 0.00 | 0.05 |
| Debt-to-equity ratio | 0.03 | 0.03 | 0.05 | 0.00 | 0.06 |
| Financial leverage ratio | 1.20 | 1.21 | 1.23 | 1.66 | 1.54 |
Advanced Micro Devices Inc has shown a strong improvement in solvency ratios over the years, as indicated by its decreasing debt-to-assets, debt-to-capital, and debt-to-equity ratios. The company has effectively managed its debt levels, with the debt-to-assets ratio declining from 0.04 in 2020 to 0.02 in 2024. Similarly, the debt-to-capital and debt-to-equity ratios have shown a consistent downward trend, reflecting a reduction in financial leverage and a healthier balance sheet structure. The financial leverage ratio has also decreased from 1.54 in 2020 to 1.20 in 2024, indicating improved financial stability and reduced reliance on debt financing. Overall, these solvency ratios suggest that Advanced Micro Devices Inc is in a strong financial position with a lower risk of financial distress.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 22.98 | 5.79 | 14.61 | 109.09 | 28.23 |
Based on the provided data, the interest coverage ratio of Advanced Micro Devices Inc has shown significant fluctuation over the past five years.
As of December 31, 2020, the interest coverage ratio was strong at 28.23, indicating the company's ability to comfortably cover its interest payments with its operating income.
By December 31, 2021, the interest coverage ratio improved substantially to 109.09, reflecting an even stronger capacity to meet its interest obligations from its earnings.
However, there was a notable decline by December 31, 2022, with the ratio dropping to 14.61. While still showing adequate coverage, this decrease suggests a decrease in earnings relative to interest expenses.
The trend continued into December 31, 2023, with a further decrease in the interest coverage ratio to 5.79, indicating a potential challenge for the company to cover its interest payments with its operating income.
By December 31, 2024, the interest coverage ratio rebounded to 22.98, showing an improvement but still below the levels seen in the earlier years.
Overall, the interest coverage ratio of Advanced Micro Devices Inc has exhibited volatility, with periods of strong coverage followed by declines. Investors and analysts may need to monitor the company's profitability and debt levels closely to assess its ability to meet its interest obligations in the future.