Extreme Networks Inc (EXTR)

The solvency ratios of Extreme Networks Inc provide insights into the company's ability to meet its long-term financial obligations. The debt-to-assets ratio has decreased steadily over the past five years, indicating that the company has been able to reduce its reliance on debt to finance its assets. This suggests a strengthening financial position in terms of asset coverage by debt.

The debt-to-capital ratio has shown some fluctuations, but generally remains at a moderate level, indicating a reasonable balance between debt and capital funding. The decreasing trend in recent years suggests an improved capital structure and reduced financial risk associated with excessive debt.

The debt-to-equity ratio has fluctuated significantly over the years, with a notable decrease from 73.10 in 2020 to 7.05 in 2024. This indicates a substantial reduction in the company's reliance on debt relative to equity, reflecting a healthier financial structure with more equity funding compared to debt.

The financial leverage ratio, which reflects the extent to which a company is using debt to finance its operations, has also shown a decreasing trend over the years. This indicates a lower reliance on debt financing compared to equity and highlights a decrease in the company's financial risk over time.

Overall, the solvency ratios of Extreme Networks Inc demonstrate positive trends in terms of reduced debt levels and improved financial stability, suggesting a stronger financial position and enhanced ability to meet its long-term obligations.

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Coverage ratios

The interest coverage ratio for Extreme Networks Inc has fluctuated over the past five years. In 2024, the interest coverage ratio was negative at -3.56, indicating that the company's earnings before interest and taxes (EBIT) were insufficient to cover its interest expenses. This suggests a potential financial risk for creditors.

In contrast, in 2023 and 2022, the interest coverage ratio improved to 6.41 and 5.08 respectively, indicating that the company's EBIT was more than sufficient to cover its interest expenses, reflecting a stronger financial position.

However, in 2021, the interest coverage ratio decreased to 1.45, suggesting a potential decrease in the company's ability to cover its interest expenses with its earnings. This may raise concerns about the company's ability to meet its debt obligations.

In 2020, the interest coverage ratio was negative at -4.07, indicating a significant lack of earnings to cover interest expenses, posing a high financial risk.

Overall, Extreme Networks Inc's interest coverage ratio has shown significant variability over the past five years, with periods of both strength and weakness in its ability to cover interest payments. Investors and creditors should closely monitor this ratio to assess the company's financial health and ability to meet its debt obligations.