DXC Technology Co (DXC)
Solvency ratios
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.28 | 0.26 | 0.26 | 0.25 | 0.25 | 0.21 | 0.21 | 0.21 | 0.20 | 0.21 | 0.22 | 0.20 | 0.20 | 0.23 | 0.31 | 0.37 | 0.33 | 0.25 | 0.26 | 0.24 |
| Debt-to-capital ratio | 0.58 | 0.56 | 0.55 | 0.54 | 0.53 | 0.45 | 0.44 | 0.45 | 0.45 | 0.47 | 0.48 | 0.45 | 0.47 | 0.49 | 0.65 | 0.69 | 0.64 | 0.46 | 0.47 | 0.42 |
| Debt-to-equity ratio | 1.36 | 1.25 | 1.20 | 1.19 | 1.12 | 0.83 | 0.80 | 0.82 | 0.80 | 0.89 | 0.91 | 0.81 | 0.87 | 0.96 | 1.83 | 2.25 | 1.81 | 0.84 | 0.90 | 0.72 |
| Financial leverage ratio | 4.93 | 4.79 | 4.67 | 4.67 | 4.53 | 3.95 | 3.84 | 3.95 | 3.99 | 4.18 | 4.22 | 4.11 | 4.43 | 4.18 | 5.83 | 6.07 | 5.43 | 3.38 | 3.45 | 2.99 |
The solvency ratios of DXC Technology Co provide insights into the company's ability to meet its long-term financial obligations.
1. Debt-to-assets ratio:
- The debt-to-assets ratio has ranged between 0.20 to 0.28 over the observed periods. This indicates that, on average, around 20% to 28% of DXC Technology Co's assets have been financed through debt.
- The trend shows a relatively stable level of debt in relation to total assets, suggesting a conservative approach to leveraging the company's resources.
2. Debt-to-capital ratio:
- The debt-to-capital ratio has fluctuated between 0.44 to 0.69 during the periods under review. This metric indicates that debt represents, on average, around 44% to 69% of the company's total capital structure.
- The increasing trend in recent periods may indicate a higher reliance on debt financing to fund operations or investments.
3. Debt-to-equity ratio:
- The debt-to-equity ratio has varied between 0.72 to 2.25 over the observed periods. This ratio reflects the proportion of debt to equity in the company's capital structure.
- The increase in the ratio in recent periods may indicate a higher level of debt relative to equity, which can pose greater financial risk due to higher interest payments and potential dependency on debt markets for funding.
4. Financial leverage ratio:
- The financial leverage ratio has ranged from 2.99 to 6.07, reflecting the company's overall financial risk. This ratio indicates the extent to which the company is using debt to finance its assets.
- The increasing trend in recent periods suggests that DXC Technology Co has been increasingly leveraging its operations with debt, potentially exposing it to higher financial risk and interest rate fluctuations.
In conclusion, DXC Technology Co's solvency ratios show a stable level of debt in relation to assets but indicate an increasing reliance on debt financing in recent periods, which may pose greater financial risk and impact the company's ability to withstand economic downturns or adverse market conditions.
Coverage ratios
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 1.38 | -1.57 | -2.27 | -3.09 | -3.44 | 6.91 | 7.95 | 5.60 | 6.50 | -0.91 | 5.81 | 5.11 | 2.80 | -4.59 | -9.18 | -13.25 | -12.68 | -2.55 | -1.71 | 4.99 |
The interest coverage ratio measures a company's ability to pay its interest expenses on outstanding debt. A higher ratio indicates a stronger ability to cover interest payments. Looking at DXC Technology Co's interest coverage over the past few quarters, there appears to be significant fluctuation.
For the most recent quarter ending March 31, 2024, the interest coverage ratio stands at 1.38. This indicates that DXC Technology Co generated just enough operating income to cover its interest expenses. In the prior quarter, the ratio was negative at -1.57, suggesting that the company's operating income was insufficient to cover its interest payments.
The trend of negative interest coverage ratios in the previous quarters, particularly in September and December of 2023, indicates a potential concern about the company's ability to service its debt obligations. However, it is important to note that there were positive ratios in the quarters before that, ranging from 6.91 to 7.95, indicating a stronger ability to cover interest expenses.
Overall, the varying interest coverage ratios suggest that DXC Technology Co's financial health in terms of covering interest expenses has been inconsistent. It would be crucial for the company to improve its operating performance and financial stability to ensure it can meet its interest payment obligations in the long term.