Avnet Inc (AVT)

The analysis of Avnet Inc.'s solvency ratios over the period from June 30, 2021, to June 30, 2025, reveals a consistent pattern indicative of a minimal reliance on debt financing. Notably, the debt-to-assets ratio, debt-to-capital ratio, and debt-to-equity ratio remain at zero throughout this timeframe, suggesting that the company has maintained an entirely debt-free capital structure. This absence of debt indicates a firm reliance on equity or other non-debt sources of financing, reflecting a conservative approach to leverage and a strong equity position.

In parallel, the financial leverage ratio exhibits values ranging from 2.19 to 2.63 during the specified years. The ratio increased from 2.19 in 2021 to a peak of 2.63 in 2023, followed by a slight decline to 2.48 in 2024 and 2.42 in 2025. This ratio measures the extent to which Avnet utilizes liabilities to fund its assets, with a higher figure denoting greater leverage. The observed fluctuations, with values consistently above 2, suggest that although the company reports no debt, it effectively employs other leverage mechanisms or has substantial assets financed through internal means.

Overall, the data portrays Avnet Inc. as a financially conservative entity with no reported debt, relying primarily on equity or own-generated funds to support its asset base. The moderate and relatively stable financial leverage ratios reflect a controlled utilization of liabilities, emphasizing stability and low financial risk in the company's capital structure.

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Coverage ratios

The interest coverage ratio of Avnet Inc has experienced notable fluctuations over the analyzed period from June 30, 2021, to June 30, 2025. As of June 30, 2021, the ratio stood at 2.93, indicating that the company's earnings before interest and taxes (EBIT) were approximately 2.93 times its interest expenses, suggesting a moderate capacity to cover interest obligations. In the subsequent year, June 30, 2022, the ratio increased significantly to 9.30, reflecting a substantial improvement in the company's ability to meet its interest payments, possibly due to increased earnings or reduced interest expenses.

However, this strengthened position was not sustained, as the interest coverage ratio declined to 4.92 by June 30, 2023. Despite the decrease, the ratio remained above 4, still indicating a reasonable cushion over interest obligations. By June 30, 2024, the ratio further decreased to 3.25, suggesting a diminishing safety margin, yet it continued to reflect that the company could cover interest expenses approximately three times with its EBIT.

The trend persisted into the projected period ending June 30, 2025, where the ratio is expected to further decline to 2.02. This figure indicates a tightening of the company's ability to comfortably cover its interest costs, approaching a level that warrants caution, as earnings are now less than three times the interest expense.

Overall, the data demonstrates a pattern of initial improvement in Avnet Inc’s interest coverage ratio, followed by a gradual deterioration over the subsequent years. While the ratios remain above the critical threshold of 1.5 to 2, signaling sufficient coverage to avoid immediate concern, the downward trend underscores the need for careful monitoring of profitability and interest management in future periods.