DXC Technology Co (DXC)

Solvency ratios provide insight into a company's ability to meet its long-term financial obligations. Looking at DXC Technology Co's solvency ratios over the past five years, the trends indicate a mixed picture.

1. Debt-to-assets ratio: This ratio measures the proportion of a company's assets financed by debt. DXC's debt-to-assets ratio has fluctuated over the years, ranging from 0.20 to 0.33. A lower ratio suggests lower financial risk, indicating that the company relies less on debt to fund its assets.

2. Debt-to-capital ratio: This ratio indicates the extent to which a company's operations are funded by debt. DXC's debt-to-capital ratio has also varied, with values between 0.45 to 0.64. A lower ratio implies a lower reliance on debt for financing operations, which may be viewed positively by investors and creditors.

3. Debt-to-equity ratio: This ratio shows the proportion of a company's financing that comes from debt versus equity. DXC's debt-to-equity ratio has fluctuated significantly over the years, from 0.80 to 1.81. A higher ratio indicates higher financial risk as the company has more debt relative to equity.

4. Financial leverage ratio: This ratio measures the company's financial leverage or the proportion of assets that are financed by debt. DXC's financial leverage ratio has shown variations, ranging from 3.99 to 5.43. A higher ratio suggests greater financial risk due to higher debt levels.

In conclusion, DXC Technology Co's solvency ratios reflect fluctuating levels of debt in its capital structure over the past five years. The company's debt levels have varied, impacting its overall solvency and financial risk. Further analysis and comparison with industry peers are recommended to gain a deeper understanding of DXC's solvency position.

---

Coverage ratios

The interest coverage ratio for DXC Technology Co has varied significantly over the past five years, indicating fluctuations in the company's ability to meet its interest obligations. In the most recent fiscal year ending March 31, 2024, the interest coverage ratio was 1.38, suggesting that the company generated enough operating income to cover its interest expenses, although with a relatively narrow margin.

In the preceding years, the interest coverage ratio was negative in 2023 and 2020, indicating that the company's operating income was insufficient to cover its interest expenses during those periods. However, there was a notable improvement in the interest coverage ratio in 2022 and 2021, with ratios of 6.50 and 2.80, respectively, indicating a stronger ability to meet interest obligations.

The significant fluctuations in DXC Technology Co's interest coverage ratio over the past five years may indicate changes in the company's financial performance, profitability, and leverage. It is essential for investors and stakeholders to closely monitor these ratios to assess the company's ability to manage its debt and financial stability.