Fabrinet (FN)

Fabrinet has consistently maintained a low level of leverage and prudent financial structure over the past five years, as indicated by its solvency ratios. The debt-to-assets, debt-to-capital, and debt-to-equity ratios have shown a declining trend, with all ratios being negligible or minimal at 0.00 in the most recent year, indicating that the company has a very low level of debt relative to its total assets, capital, and equity.

Additionally, the financial leverage ratio, which reflects the proportion of debt in the company's capital structure, has also decreased gradually over the years, from 1.46 in 2022 to 1.34 in 2024. This indicates that the company has a moderate level of financial leverage, with a higher proportion of equity financing compared to debt financing.

Overall, the solvency ratios of Fabrinet demonstrate a strong financial position and the company's ability to meet its financial obligations comfortably, with a conservative approach to debt management and capital structure. This indicates a low risk of financial distress and a solid foundation for sustainable growth and financial stability.

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Coverage ratios

Fabrinet's interest coverage ratio has exhibited a significant upward trend over the past five years. The ratio stood at 40.17 in Jun 30, 2020, and has since increased to 2,238.75 in Jun 30, 2024, reflecting a substantial improvement in the company's ability to cover its interest expenses. This indicates that Fabrinet's earnings before interest and taxes (EBIT) are sufficiently high to cover its interest obligations, highlighting a strong financial position and enhanced solvency. The consistent increase in the interest coverage ratio signifies improved financial stability and lower default risk for the company.