Genpact Limited (G)

The solvency ratios of Genpact Limited provide insights into the company's ability to meet its long-term financial obligations. Here is a detailed analysis of the solvency ratios based on the provided data:

1. Debt-to-Assets Ratio:
- The debt-to-assets ratio measures the proportion of a company's assets that are financed through debt.
- Genpact's debt-to-assets ratio fluctuated between 0.16 to 0.34 over the period from March 31, 2020, to December 31, 2024.
- The ratio declined in the latter half of the period, indicating a decrease in the proportion of debt relative to total assets.
- A lower debt-to-assets ratio suggests that the company has less financial risk as a significant portion of its assets is financed through equity rather than debt.

2. Debt-to-Capital Ratio:
- The debt-to-capital ratio reflects the percentage of a company's capital that is provided by debt.
- Genpact's debt-to-capital ratio ranged from 0.26 to 0.48 during the period under review.
- The ratio showed some variability but trended downwards towards the end of the period.
- A decreasing trend in the debt-to-capital ratio implies a reduced reliance on debt financing for the company's overall capital structure.

3. Debt-to-Equity Ratio:
- The debt-to-equity ratio measures the proportion of a company's financing that comes from debt relative to equity.
- Genpact's debt-to-equity ratio ranged from 0.36 to 0.94 during the analyzed period.
- The ratio exhibited fluctuations but generally decreased towards the later years, indicating a lower dependency on debt for financing the company's operations.
- A decreasing debt-to-equity ratio suggests a stronger financial position and lower risk as the company relies more on equity financing.

4. Financial Leverage Ratio:
- The financial leverage ratio indicates the extent to which a company uses debt to finance its operations.
- Genpact's financial leverage ratio declined from 2.80 to 2.06 between March 31, 2020, and December 31, 2024.
- The decreasing trend in the leverage ratio signifies a reduced reliance on debt to support the company's operations and investments.
- A lower financial leverage ratio implies a lower financial risk for the company as it indicates a lower level of debt used in the capital structure.

In summary, the solvency ratios of Genpact Limited demonstrate a favorable trend towards lower debt levels and a stronger reliance on equity for financing, indicating improved financial stability and reduced risk over the analyzed period.

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Coverage ratios

Based on the provided data for Genpact Limited's interest coverage ratio over the period from March 31, 2020, to December 31, 2024, we observe fluctuations in the company's ability to cover its interest expenses with its operating income.

- The interest coverage ratio started at a healthy level of 15.71 in March 2020, indicating that Genpact had ample operating income to cover its interest obligations.
- Over the next few quarters, the interest coverage ratio declined steadily, reaching a low of 7.80 by December 2020. This drop may suggest a decrease in the company's profitability relative to its interest expenses during this period.
- The ratio showed signs of improvement in the following quarters, peaking at 9.51 by December 2023. This indicates that Genpact's operating income had strengthened to better support its interest payments.
- However, by the end of December 2024, the interest coverage ratio had increased further to 10.04, signaling a potential enhancement in the company's ability to service its interest obligations compared to earlier periods.

Overall, the trend in Genpact Limited's interest coverage ratio reflects fluctuations in the company's financial health and profitability, with periods of both vulnerability and improvement in its ability to cover interest expenses. It is essential for stakeholders to monitor this ratio closely to assess the company's financial risk and sustainability.