Broadridge Financial Solutions Inc (BR)

Broadridge Financial Solutions Inc's solvency ratios provide insight into the company's ability to meet its financial obligations and the extent to which it relies on debt financing.

The debt-to-assets ratio has shown fluctuation over the past five years, ranging from 0.27 to 0.48. A lower ratio indicates a lower proportion of assets financed by debt, suggesting a lower financial risk. However, the ratio increased in 2022 and 2021, indicating a higher reliance on debt to finance assets during those periods.

The debt-to-capital ratio has also varied, with values between 0.50 and 0.68. This ratio signifies the proportion of capital funded by debt, and an increasing trend over the years could point to a higher financial leverage.

The debt-to-equity ratio has exhibited a similar pattern, ranging from 1.00 to 2.15. A higher ratio indicates greater financial risk as a higher proportion of equity is financed by debt. Broadridge Financial Solutions Inc's ratio has generally been on the higher side over the past five years, which might suggest a higher level of financial leverage.

The financial leverage ratio, which measures total assets relative to shareholder's equity, has also shown variability. This ratio has ranged from 3.63 to 4.49, indicating changes in the company's capital structure over time.

In conclusion, Broadridge Financial Solutions Inc's solvency ratios reflect fluctuations in its debt ratios over the past five years, highlighting shifts in the company's leverage and financial risk levels. Investors and stakeholders should closely monitor these ratios to assess the company's solvency and ability to meet its debt obligations.

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Coverage ratios

Broadridge Financial Solutions Inc's interest coverage ratio has shown a decreasing trend over the past five years. The interest coverage ratio for June 30, 2024, is 6.77, indicating that the company generated operating income 6.77 times the amount needed to cover its interest expense for the year.

Compared to the previous years, the interest coverage ratio was 6.52 in June 30, 2023, 8.66 in June 30, 2022, 11.80 in June 30, 2021, and 10.00 in June 30, 2020. This declining trend suggests that the company's ability to meet its interest obligations from operating income has weakened over time.

A decreasing interest coverage ratio can indicate that Broadridge Financial Solutions Inc may be taking on more debt or experiencing a decrease in operating income relative to its interest expenses. Investors and creditors may view a declining interest coverage ratio as a potential red flag for the company's financial health and ability to service its debt in the long term.