Cognizant Technology Solutions Corp Class A (CTSH)

Solvency ratios

	Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Debt-to-assets ratio	0.04	0.06	0.03	0.03	0.03	0.03	0.03	0.03	0.04	0.04	0.04	0.04	0.04	0.04	0.04	0.04	0.04	0.13	0.13	0.14
Debt-to-capital ratio	0.06	0.08	0.04	0.04	0.04	0.05	0.05	0.05	0.05	0.05	0.05	0.05	0.05	0.05	0.05	0.06	0.06	0.18	0.18	0.19
Debt-to-equity ratio	0.06	0.08	0.04	0.04	0.05	0.05	0.05	0.05	0.05	0.05	0.05	0.05	0.05	0.06	0.06	0.06	0.06	0.22	0.22	0.23
Financial leverage ratio	1.39	1.40	1.34	1.36	1.40	1.40	1.39	1.43	1.45	1.45	1.44	1.46	1.49	1.49	1.50	1.51	1.56	1.69	1.66	1.64

The solvency ratios of Cognizant Technology Solutions Corp Class A provide insights into the company's ability to meet its long-term financial obligations.

1. Debt-to-assets ratio: This ratio indicates the proportion of the company's assets financed by debt. Cognizant's debt-to-assets ratio has been relatively stable, decreasing from 0.14 in March 2020 to 0.03 by June 2024. A lower ratio signifies better solvency as the company relies less on debt to fund its assets.

2. Debt-to-capital ratio: This ratio measures the percentage of the company's capital structure that is funded by debt. Cognizant's debt-to-capital ratio decreased from 0.19 in March 2020 to 0.04 by June 2024. A declining trend indicates a reduced reliance on debt financing, reflecting positively on the company's solvency.

3. Debt-to-equity ratio: The debt-to-equity ratio demonstrates the extent to which the company is leveraged through debt in relation to its equity. Cognizant's debt-to-equity ratio declined from 0.23 in March 2020 to 0.04 by June 2024. A lower ratio implies that the company has a stronger equity position relative to its debt, enhancing its solvency.

4. Financial leverage ratio: This ratio reflects the company's financial leverage and its ability to meet debt obligations. Cognizant's financial leverage ratio decreased consistently from 1.64 in March 2020 to 1.39 by December 2024. A decreasing trend signals a reduction in financial risk and indicates improved solvency.

Overall, the solvency ratios of Cognizant Technology Solutions Corp Class A demonstrate a positive trajectory over the analyzed period, with decreasing ratios indicating a stronger financial position and a reduced reliance on debt financing. The company's consistent improvement in solvency ratios suggests enhanced financial stability and a capacity to fulfill its long-term obligations effectively.

Coverage ratios

	Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Interest coverage	55.44	65.37	69.02	65.67	69.15	73.50	87.39	117.35	159.95	235.15	297.30	323.00	315.44	257.00	189.69	113.60	88.33	82.37	80.64	97.44

Cognizant Technology Solutions Corp Class A's interest coverage ratio has displayed considerable fluctuations over the years based on the provided data. The interest coverage ratio measures the company's ability to meet its interest obligations on outstanding debt using its operating income.

From March 31, 2020, to June 30, 2021, the interest coverage ratio steadily increased from 97.44 to 189.69, indicating a significant improvement in Cognizant's ability to cover its interest expenses. This upward trend continued until reaching a peak of 323.00 on March 31, 2022, suggesting a strong capacity to fulfill interest payments.

However, starting from June 30, 2022, the interest coverage ratio began to decline. The ratio dropped to 55.44 by December 31, 2024, signalling a substantial decrease in Cognizant's ability to cover its interest costs compared to the previous periods.

Overall, Cognizant's interest coverage ratio has shown both positive and negative trends during the period under consideration. Investors and analysts should closely monitor this ratio to assess the company's financial health and ability to manage its debt obligations effectively.