CleanSpark Inc (CLSK)

The analysis of CleanSpark Inc.'s solvency ratios over the period from September 30, 2020, to September 30, 2024, indicates a consistent absence of debt-related liabilities. Specifically, the debt-to-assets ratio, debt-to-capital ratio, and debt-to-equity ratio all remain at zero across all five reporting dates. This suggests that the company has maintained a debt-free capital structure throughout this period, relying primarily on equity and internal financing sources rather than external debt.

In terms of financial leverage, the ratios fluctuate slightly but remain within a relatively narrow range. The financial leverage ratio decreased from 1.36 in September 2020 to approximately 1.04 in September 2021 and remained relatively stable thereafter, with minor variations around 1.11 to 1.12. This stability indicates that the company's use of leverage—though minimal—has been consistent, reflecting a conservative approach to capital structure management.

Overall, CleanSpark Inc. demonstrates a robust solvency profile characterized by negligible debt levels. The zero ratios in debt-related metrics highlight a conservative financial strategy with minimal reliance on external financing, potentially reducing financial risk and increasing resilience against economic downturns. The steady leverage ratio further supports a prudent leverage philosophy, emphasizing reliance on internal funds and equity capital for operational needs.

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Coverage ratios

The interest coverage ratios for CleanSpark Inc. over the specified periods demonstrate a persistently negative trend, indicating ongoing challenges in meeting interest expenses through operating earnings. Specifically, as of September 30, 2020, the interest coverage was recorded at -1.17, suggesting that operating income was insufficient to cover interest expenses, and the company was experiencing difficulties in generating enough profit to service its debt obligations. This negative ratio significantly worsened in subsequent years, moving to -55.36 as of September 30, 2021, which indicates a substantial decline in operating earning capacity relative to interest costs. The trend of negative interest coverage persisted in 2022 and 2023, with ratios of -36.08 and -43.11 respectively, reflecting continued inability to generate adequate earnings to cover interest expenses. The forecasted ratio for September 30, 2024, is expected to decline further to -57.02, suggesting further deterioration in the company’s ability to meet interest obligations solely through operating earnings. Overall, the consistently negative interest coverage ratios highlight significant financial distress, implying that the company's earnings are insufficient to cover interest payments and raising concerns about liquidity and solvency under the current operational and financial structure.