Cadence Design Systems Inc (CDNS)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 1.92 | 1.67 | 1.87 | 1.60 | 1.58 |
Cadence Design Systems Inc has maintained a strong solvency position over the years, as evidenced by the consistently low debt-to-assets, debt-to-capital, and debt-to-equity ratios, all of which were reported as 0.00 from December 31, 2020, to December 31, 2024. This indicates that the company has minimal financial leverage and is not heavily reliant on debt to finance its operations and investments.
However, it is worth noting that the financial leverage ratio has shown some fluctuation over the period, increasing from 1.58 in 2020 to 1.60 in 2021, reaching 1.87 in 2022, then decreasing to 1.67 in 2023, and further rising to 1.92 in 2024. This ratio measures the proportion of Cadence Design Systems' total assets that are financed by debt, and the increasing trend indicates a higher reliance on debt financing in some years.
Overall, while the company's low debt ratios reflect a conservative approach to managing its capital structure, investors and stakeholders should keep an eye on the fluctuating financial leverage ratio to understand the changing dynamics of Cadence Design Systems' leverage position.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 19.37 | 35.20 | 46.58 | 46.26 | 31.50 |
Based on the data provided for Cadence Design Systems Inc, the interest coverage ratio has shown a generally positive trend over the years. The interest coverage ratio measures a company's ability to meet its interest obligations with its earnings before interest and taxes (EBIT).
In December 31, 2020, the interest coverage ratio was 31.50, indicating that the company generated 31.50 times the amount needed to cover its interest expenses. This suggests a robust financial position with a strong ability to fulfill its interest obligations.
The ratio further improved in the following years, reaching 46.26 in December 31, 2021, and slightly increasing to 46.58 in December 31, 2022. These numbers indicate a continued improvement in the company's ability to cover its interest expenses comfortably.
However, there was a slight decline in December 31, 2023, with the interest coverage ratio dropping to 35.20. This decrease may warrant further investigation into the company's financial performance and its ability to sustain its interest payments.
In the most recent year, December 31, 2024, the interest coverage ratio fell further to 19.37. This decline raises concerns about the company's decreasing ability to cover its interest expenses with its earnings and may indicate a potential strain on its financial health.
Overall, while the company has shown strength in maintaining a high interest coverage ratio in the past, the recent decline raises caution and suggests a need for closer monitoring of Cadence Design Systems Inc's financial performance and interest payment obligations.