Dayforce Inc. (DAY)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| 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 | 3.76 | 4.01 | 3.22 | 3.19 | 3.23 |
Dayforce Inc. has consistently maintained a debt-to-assets ratio, debt-to-capital ratio, and debt-to-equity ratio of 0.00 over the past five years. This indicates that the company has not relied on debt to finance its operations and investments, which can be perceived as a positive sign of financial stability and lower financial risk.
However, the financial leverage ratio has fluctuated over the same period, with values ranging from 3.19 to 4.01. This ratio measures the proportion of a company's assets that are financed by debt rather than equity. A higher financial leverage ratio suggests that the company is relying more heavily on debt to fund its operations, which can increase financial risk during economic downturns or in periods of financial distress. The decreasing trend in the financial leverage ratio from 2021 to 2023 could indicate a move towards a more conservative capital structure.
Overall, based on the solvency ratios provided, Dayforce Inc. appears to have a solid financial position with minimal reliance on debt financing. The fluctuations in the financial leverage ratio should be monitored to assess the company's capital structure and risk management strategies in the future.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 3.66 | -1.20 | -1.52 | 0.20 | 2.06 |
Interest coverage ratio is a financial metric that reflects a company's ability to meet its interest obligations from its operating income. A higher interest coverage ratio indicates a stronger ability to cover interest expenses, while a lower ratio suggests potential financial distress.
For Dayforce Inc., the interest coverage ratio has varied significantly over the past five years. In 2023, the interest coverage ratio improved to 3.66, indicating the company generated more than enough operating income to cover its interest expenses. This is a positive sign of financial health and indicates that Dayforce Inc. has a comfortable cushion to meet its interest obligations.
However, in 2022 and 2021, the company's interest coverage ratio was negative (-1.20 and -1.52, respectively), indicating that the company's operating income was insufficient to cover its interest expenses during those years. This is a concerning sign as it suggests financial instability and raises questions about Dayforce Inc.'s ability to meet its debt obligations.
In 2020, the interest coverage ratio was 0.20, which indicates a minimal ability to cover interest expenses from operating income. This further reinforces the financial challenges faced by Dayforce Inc. during that year.
In contrast, in 2019, the company had an interest coverage ratio of 2.06, which was better than the following years but still below the ideal threshold of 3 or higher. This suggests that although the company was able to cover its interest expenses in 2019, there was room for improvement.
Overall, the trend in Dayforce Inc.'s interest coverage ratio shows fluctuations over the years, with improvements in 2023 compared to the previous years. It is important for stakeholders to monitor this ratio closely to assess the company's financial stability and ability to meet its debt obligations in the future.