Broadcom Inc (AVGO)
Solvency ratios
| Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Nov 1, 2020 | Nov 3, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.46 | 0.45 | 0.55 | 0.53 | 0.44 |
| Debt-to-capital ratio | 0.58 | 0.59 | 0.62 | 0.63 | 0.55 |
| Debt-to-equity ratio | 1.38 | 1.45 | 1.65 | 1.68 | 1.20 |
| Financial leverage ratio | 3.04 | 3.23 | 3.02 | 3.18 | 2.71 |
The solvency ratios of Broadcom Inc indicate its ability to meet its long-term financial obligations and the extent of its reliance on debt financing. The debt-to-assets ratio has remained relatively stable over the past five years, with a slight increase from 0.49 in 2019 to 0.54 in 2023, suggesting that the company's assets are financed by 54% debt in the most recent fiscal year.
The debt-to-capital ratio, which measures the proportion of capital structure attributable to debt, has also remained consistent, albeit slightly higher at 0.62 in 2023 compared to 0.57 in 2019. This indicates that 62% of Broadcom's capital structure is attributed to debt in the latest fiscal year.
The debt-to-equity ratio, a key solvency metric, shows a pattern of increase from 1.31 in 2019 to 1.64 in 2023, indicating that the company's reliance on debt relative to equity has grown over the years.
Finally, the financial leverage ratio, which reflects the proportion of a company's assets that are financed with debt, has also exhibited an upward trend from 2.70 in 2019 to 3.04 in 2023, pointing to a higher degree of financial risk.
In summary, Broadcom Inc's solvency ratios indicate a consistent reliance on debt financing, with increasing levels of leverage and debt relative to assets and equity over the past five years. This suggests a potentially higher risk associated with the company's long-term financial obligations.
Coverage ratios
| Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Nov 1, 2020 | Nov 3, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 9.99 | 8.19 | 4.52 | 2.26 | 2.39 |
Broadcom Inc's interest coverage has shown a positive trend over the past five years, indicating its ability to meet interest obligations. The interest coverage ratio has increased consistently from 3.16 in November 2019 to 15.14 in October 2023, reflecting improved earnings relative to interest expenses. This suggests a strengthening financial position and reduced risk of default on interest payments. The significant improvement in the interest coverage ratio signifies the company's enhanced capacity to service its debt and indicates a positive performance in managing its interest obligations.