Cadence Design Systems Inc (CDNS)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.05 | 0.13 | 0.08 | 0.09 | 0.10 |
| Debt-to-capital ratio | 0.08 | 0.19 | 0.11 | 0.12 | 0.14 |
| Debt-to-equity ratio | 0.09 | 0.24 | 0.13 | 0.14 | 0.16 |
| Financial leverage ratio | 1.67 | 1.87 | 1.60 | 1.58 | 1.60 |
Cadence Design Systems, Inc. has exhibited a steady improvement in its solvency ratios over the past five years. The debt-to-assets ratio, which measures the proportion of total assets financed by debt, has decreased from 0.15 in 2022 to 0.11 in 2023, indicating that the company is relying less on debt to fund its operations.
Similarly, the debt-to-capital ratio, which indicates the percentage of capital structure financed by debt, has shown a decreasing trend from 0.21 in 2022 to 0.16 in 2023. This suggests that Cadence Design Systems, Inc. is becoming less leveraged and more reliant on equity to finance its operations.
The debt-to-equity ratio has also improved from 0.27 in 2022 to 0.19 in 2023, signaling that the company's reliance on debt relative to equity has decreased. Additionally, the financial leverage ratio, which measures the proportion of assets financed by debt relative to equity, has decreased from 1.87 in 2022 to 1.67 in 2023, indicating a lower overall financial risk.
Overall, the solvency ratios of Cadence Design Systems, Inc. demonstrate a positive trajectory, reflecting a stronger financial position and a reduced dependency on debt for financing its operations.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 36.43 | 46.58 | 46.26 | 31.50 | 26.44 |
Cadence Design Systems, Inc.'s interest coverage ratio has shown a consistent improvement over the past five years. The interest coverage ratio has increased steadily from 53.69 in December 2019 to 192.77 in December 2023. This upward trend indicates that the company's ability to cover its interest expenses with its operating income has significantly improved over time.
The substantial increase in the interest coverage ratio signifies that Cadence Design Systems, Inc. has a strong capability to meet its interest obligations from its operating earnings. This enhanced financial efficiency indicates a positive trend in the company's financial health and stability. Overall, the progressive improvement in the interest coverage ratio reflects Cadence Design Systems, Inc.'s ability to manage its debt and generate sufficient earnings to cover its interest expenses.