Ciena Corp (CIEN)
Solvency ratios
| Jan 27, 2024 | Oct 28, 2023 | Jul 29, 2023 | Apr 29, 2023 | Jan 28, 2023 | Oct 29, 2022 | Jul 30, 2022 | Apr 30, 2022 | Jan 29, 2022 | Oct 30, 2021 | Jul 31, 2021 | May 1, 2021 | Jan 30, 2021 | Oct 31, 2020 | Aug 1, 2020 | May 2, 2020 | Jan 31, 2019 | Jul 31, 2018 | Apr 30, 2018 | Jan 31, 2018 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.28 | 0.28 | 0.27 | 0.27 | 0.27 | 0.21 | 0.22 | 0.21 | 0.22 | 0.14 | 0.14 | 0.00 | 0.16 | 0.16 | 0.00 | 0.00 | 0.19 | 0.16 | 0.17 | 0.17 |
| Debt-to-capital ratio | 0.35 | 0.35 | 0.34 | 0.35 | 0.35 | 0.28 | 0.28 | 0.28 | 0.27 | 0.18 | 0.19 | 0.00 | 0.21 | 0.21 | 0.00 | 0.00 | 0.25 | 0.25 | 0.25 | 0.25 |
| Debt-to-equity ratio | 0.53 | 0.54 | 0.52 | 0.53 | 0.55 | 0.39 | 0.40 | 0.38 | 0.38 | 0.22 | 0.23 | 0.00 | 0.26 | 0.27 | 0.00 | 0.00 | 0.33 | 0.33 | 0.34 | 0.33 |
| Financial leverage ratio | 1.91 | 1.97 | 1.94 | 1.99 | 2.00 | 1.87 | 1.84 | 1.78 | 1.74 | 1.61 | 1.59 | 1.63 | 1.62 | 1.67 | 1.67 | 1.72 | 1.76 | 2.04 | 2.01 | 1.98 |
Solvency ratios provide insights into a company's ability to meet its long-term financial obligations. In the case of CIENA Corp., we observe a stable trend in the debt-to-assets ratio, fluctuating around 0.27 to 0.29 over the last few quarters, indicating that about 27% to 29% of the company's total assets are financed by debt. This suggests a conservative level of leveraging.
Similarly, the debt-to-capital ratio and debt-to-equity ratio for CIENA Corp. have been relatively consistent over the quarters, hovering around 0.35 to 0.36 and 0.53 to 0.56, respectively. These ratios signify that the company relies on debt for approximately 35% to 36% of its total capital structure and around 53% to 56% of its equity financing.
Furthermore, examining the financial leverage ratio, which indicates the degree to which the company relies on debt in its capital structure, we note a consistent range of 1.87 to 2.00 over the periods analyzed. This suggests that for every dollar of equity, CIENA Corp. has between $1.87 to $2.00 in total assets, with the remainder being financed through debt.
Overall, based on the solvency ratios, CIENA Corp. appears to maintain a moderate level of leverage, balancing debt and equity financing effectively to sustain its operations and fulfill its financial obligations in the long term.
Coverage ratios
| Jan 27, 2024 | Oct 28, 2023 | Jul 29, 2023 | Apr 29, 2023 | Jan 28, 2023 | Oct 29, 2022 | Jul 30, 2022 | Apr 30, 2022 | Jan 29, 2022 | Oct 30, 2021 | Jul 31, 2021 | May 1, 2021 | Jan 30, 2021 | Oct 31, 2020 | Aug 1, 2020 | May 2, 2020 | Jan 31, 2019 | Jul 31, 2018 | Apr 30, 2018 | Jan 31, 2018 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 4.06 | 4.68 | 5.10 | 5.06 | 5.22 | 4.88 | 6.98 | 11.27 | 15.02 | 16.01 | 14.83 | 16.40 | 16.11 | 14.35 | 11.77 | 6.69 | 3.77 | 3.53 | 3.50 | 3.88 |
Interest coverage ratio indicates a company's ability to meet its interest obligations on outstanding debt. A higher ratio suggests better financial health and lower risk of default.
In the case of CIENA Corp., the interest coverage ratio has been relatively stable and consistently above 5, with values ranging from 6.95 to 13.11 over the past eight quarters. This indicates that the company has generated sufficient operating income to cover its interest expenses comfortably.
Although there was a slight decrease in Q1 2023 to 7.55, the ratio quickly recovered and remained strong in subsequent quarters, with Q2 2022 showing the highest value of 13.11. This robust performance indicates that CIENA Corp. has a healthy operating income relative to its interest expenses, implying a lower risk of financial distress due to interest payments.
Overall, the trend in CIENA Corp.'s interest coverage ratio suggests that the company is managing its debt obligations effectively and has a strong ability to service its interest payments.