Box Inc (BOX)

The solvency ratios of Box Inc over the past five years indicate a consistent and prudent management of debt levels. The debt-to-assets ratio has ranged from 0.04 in January 2020 to 0.31 in January 2023, with the latest figure at 0.30 as of January 2024. This suggests that the company has maintained a healthy balance between its debt and assets, with a decreasing trend in recent years.

The debt-to-capital and debt-to-equity ratios provide further insights into Box Inc's financial structure. The debt-to-capital ratio was 0.64 in January 2020 and increased to 0.66 in January 2021, showing a slight rise in the proportion of debt in the company's capital structure. Similarly, the debt-to-equity ratio moved from 1.79 in January 2020 to 1.97 in January 2021, indicating a higher reliance on debt relative to equity during this period.

Lastly, the financial leverage ratio, which measures the extent to which a company relies on debt to finance its operations, was 42.94 in January 2020, notably higher than in subsequent years. This indicates a significant increase in leverage during that period, which could have been driven by strategic decisions or external factors.

Overall, Box Inc's solvency ratios suggest a generally stable debt management approach, with a focus on maintaining an appropriate balance between debt and equity to support the company's financial health and operational stability.

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Coverage ratios

Box Inc's interest coverage ratio has shown significant fluctuations over the past five years, ranging from negative figures to positive figures.

In January 2024, the interest coverage ratio improved substantially to 65.66, indicating that the company's ability to cover interest expenses with operating income has strengthened. This is a positive trend compared to the previous year, implying that Box Inc is in a better financial position to meet its interest obligations.

In January 2023, the interest coverage ratio stood at 17.44, which was a notable improvement from the negative figures reported in the two preceding years. This indicates that the company's operating income was more than sufficient to cover its interest expenses, albeit to a lesser extent compared to the following year.

On the other hand, in January 2022, the interest coverage ratio was -7.06, signaling that Box Inc's operating income was inadequate to cover its interest expenses. This raises concerns about the company's ability to service its debt obligations using its current earnings.

Similarly, in January 2021 and 2020, the interest coverage ratios were -6.54 and -31.11, respectively, continuing the negative trend observed in the previous years. These ratios imply that Box Inc faced significant challenges in generating enough income to cover its interest payments during these periods.

Overall, the fluctuating trend in Box Inc's interest coverage ratio over the past five years suggests varying levels of financial health and debt servicing capability. It is essential for the company to maintain a consistently positive interest coverage ratio to ensure its long-term financial stability and ability to meet its debt obligations.