ANSYS Inc (ANSS)

The solvency ratios of Ansys Inc. indicate the company's ability to meet its long-term debt obligations and provide insights into its financial leverage and capital structure over the past five years.

1. Debt-to-assets ratio: This ratio shows the proportion of the company's assets that are financed by debt. Ansys Inc. has maintained a decreasing trend in this ratio from 0.12 in 2021 to 0.10 in 2023, suggesting improved financial stability and lower dependence on debt for financing its assets.

2. Debt-to-capital ratio: This ratio indicates the percentage of the company's capital structure that is financed by debt. Ansys Inc. has shown a similar declining trend in this ratio from 0.14 in 2021 to 0.12 in 2023, highlighting a decreasing reliance on debt to fund its operations and investments.

3. Debt-to-equity ratio: This ratio measures the extent to which the company's operations are funded by debt compared to equity. Ansys Inc. has experienced a decrease in this ratio from 0.17 in 2021 to 0.14 in 2023, indicating a lower level of debt relative to equity, which is a positive indicator of financial health and stability.

4. Financial leverage ratio: This ratio reflects the company's use of debt in its capital structure. Ansys Inc. has maintained a slightly fluctuating trend in this ratio, with a slight decrease from 1.45 in 2020 to 1.36 in 2023. This suggests that the company has been effectively managing its financial leverage over the years.

Overall, the decreasing trends in the debt-to-assets, debt-to-capital, and debt-to-equity ratios, along with the stable financial leverage ratio, indicate that Ansys Inc. has been gradually reducing its reliance on debt financing, improving its financial position, and maintaining a healthy balance between debt and equity in its capital structure.

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Coverage ratios

The interest coverage ratio reflects Ansys Inc.'s ability to meet its interest obligations with its operating income. The trend in Ansys Inc.'s interest coverage ratio has been decreasing over the past five years, which indicates a decline in the company's ability to cover its interest payments.

In 2023, Ansys Inc.'s interest coverage ratio of 22.72 indicates that the company's operating income is 22.72 times higher than its interest expenses for the year. While this ratio is still considered healthy, the downward trend from 2019's ratio of 83.91 to 2023's ratio suggests a potential risk in the company's ability to cover its interest expenses in the future.

It is important for stakeholders to closely monitor this trend and assess the factors contributing to the decreasing interest coverage ratio to understand the company's financial health and its ability to service its debt obligations.