Godaddy Inc (GDDY)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.50 | 0.55 | 0.52 | 0.48 | 0.38 |
| Debt-to-capital ratio | 0.98 | 1.10 | 0.98 | 1.00 | 0.75 |
| Debt-to-equity ratio | 61.07 | — | 47.22 | — | 3.08 |
| Financial leverage ratio | 121.62 | — | 90.78 | — | 8.16 |
The solvency ratios of Godaddy Inc provide insight into the company's ability to meet its long-term financial obligations.
1. Debt-to-assets ratio: This ratio indicates the proportion of the company's assets financed by debt. Over the five-year period, the trend shows an increase from 0.38 in 2019 to 0.50 in 2023, suggesting that Godaddy is using more debt to finance its assets.
2. Debt-to-capital ratio: This ratio reflects the extent of a company's capital that is financed by debt. The trend for Godaddy shows fluctuations, with a peak of 1.09 in 2022 and a decrease to 0.98 in 2023. This indicates that the company has been relying heavily on debt to finance its operations.
3. Debt-to-equity ratio: This ratio measures the proportion of debt and equity used to finance the company's assets. The significant increase in this ratio from 3.10 in 2019 to 61.36 in 2023 indicates a growing reliance on debt to support the company's operations.
4. Financial leverage ratio: This ratio indicates the level of debt a company uses to finance its assets relative to equity. The steep increase from 8.16 in 2019 to 121.62 in 2023 suggests a substantial rise in financial leverage, which may indicate increased financial risk for the company.
Overall, the increasing trend in most of the solvency ratios for Godaddy Inc signals a growing reliance on debt to fund its operations and investments. This could potentially raise concerns about the company's financial stability and ability to repay its debt obligations in the long term.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 3.25 | 3.43 | 3.01 | -4.44 | 2.36 |
The interest coverage ratio for Godaddy Inc over the past five years has shown a generally positive trend, indicating the company's ability to comfortably meet its interest obligations. The ratio has ranged from 2.20 in 2019 to 3.57 in 2023, with improvements seen in 2020, 2022, and 2023 compared to 2019. This suggests that Godaddy's earnings before interest and taxes (EBIT) have been sufficient to cover its interest expenses, providing a buffer for potential financial risks. Overall, the increasing trend in the interest coverage ratio reflects a healthier financial position for the company in terms of servicing its debt obligations.