Avnet Inc (AVT)

The solvency ratios of Avnet Inc over the past five years indicate the company's ability to meet its financial obligations and manage its debt levels.

1. Debt-to-assets ratio:
- Avnet Inc has shown a decreasing trend in its debt-to-assets ratio from 0.24 in 2023 to 0.20 in 2024. This indicates that the company has been reducing its reliance on debt to finance its assets, which is generally a positive sign for solvency.

2. Debt-to-capital ratio:
- The debt-to-capital ratio of Avnet Inc has also decreased over the years, from 0.39 in 2023 to 0.33 in 2024. This shows that the company has reduced its debt compared to its total capital, which is favorable for solvency.

3. Debt-to-equity ratio:
- Avnet Inc has managed to decrease its debt-to-equity ratio consistently over the years, from 0.63 in 2023 to 0.49 in 2024. A lower debt-to-equity ratio indicates that the company relies less on debt financing and has a stronger equity position, which is a good sign for solvency.

4. Financial leverage ratio:
- The financial leverage ratio of Avnet Inc has fluctuated over the years but has remained relatively stable around the 2.5 range. This ratio measures the company's ability to meet its financial obligations through its capital structure. The stability in this ratio indicates that Avnet Inc has maintained a consistent level of financial leverage to support its operations.

Overall, based on the solvency ratios analyzed, Avnet Inc appears to be effectively managing its debt levels and financial obligations, which contributes to its overall solvency and financial stability.

---

Coverage ratios

Avnet Inc's interest coverage ratio has shown significant fluctuations over the past five years. In 2024, the interest coverage ratio stood at 3.24, indicating that the company generated sufficient operating income to cover its interest expenses. This ratio decreased from the previous year, suggesting a potential decrease in the company's ability to meet interest payments.

In 2023, the interest coverage ratio was 4.92, which was a positive sign, reflecting a strong ability to service its debt obligations from operating income. The ratio improved significantly from 2021, indicating enhanced financial stability.

The year 2022 saw a notable interest coverage ratio of 9.30, reflecting a robust financial position with ample earnings to cover interest expenses. This marked improvement from the preceding years indicates a positive trend in the company's financial performance.

In 2021, the interest coverage ratio was 2.93, which was a decline from the previous year but still above the industry average. Although the ratio decreased, it remained at a satisfactory level, indicating that the company could comfortably meet its interest payments.

In 2020, Avnet Inc had a negative interest coverage ratio of -0.06, suggesting that the company's operating income was insufficient to cover its interest expenses. This alarming result could indicate financial distress or a temporary setback in the company's operations.

Overall, while Avnet Inc has demonstrated fluctuations in its interest coverage ratio over the past five years, the company has generally maintained a level of financial health, with some years showing stronger ability to cover interest payments than others. It is essential for investors and stakeholders to monitor this ratio closely to assess the company's financial stability and debt servicing capability.