Gen Digital Inc. (GEN)

The solvency ratios of Gen Digital Inc. provide insight into the company's ability to meet its long-term financial obligations. The trends observed over the past five years are as follows:

1. Debt-to-assets ratio: Gen Digital Inc.'s debt-to-assets ratio has fluctuated between 0.39 and 0.60 over the past five years. A lower ratio indicates a healthier financial position, as it suggests that the company relies less on debt to finance its assets. The ratio decreased from 0.60 in 2023 to 0.53 in 2024, reflecting a more conservative approach to debt management.

2. Debt-to-capital ratio: The debt-to-capital ratio measures the proportion of a company's capital that is financed through debt. Gen Digital Inc.'s ratio has ranged from 0.79 to 1.18 over the past five years. A higher ratio indicates higher financial risk, as it implies a larger portion of debt in the company's capital structure. The decrease in the ratio from 1.18 in 2021 to 0.79 in 2024 suggests that the company has reduced its reliance on debt financing.

3. Debt-to-equity ratio: The debt-to-equity ratio measures the extent to which a company is financing its operations through debt versus equity. Gen Digital Inc.'s ratio has shown significant fluctuations, ranging from 3.84 to 346.50 over the years. The extreme value of 346.50 in 2020 indicates a very high level of debt relative to equity, which may raise concerns about the company's financial stability. It's worth noting that the ratio was not available for 2022 and 2021.

4. Financial leverage ratio: The financial leverage ratio indicates the amount of debt in a company's capital structure relative to its equity. Gen Digital Inc.'s financial leverage ratio has varied from 7.18 to 773.50 over the past five years. The sharp decrease in the ratio from 773.50 in 2020 to 7.18 in 2024 indicates a significant improvement in the company's leverage position, with a shift towards lower debt levels relative to equity.

Overall, based on the trends in the solvency ratios, Gen Digital Inc. appears to have made efforts to strengthen its financial position by managing its debt levels more effectively and reducing its reliance on debt financing over the years. However, the company's solvency remains an important aspect to monitor, especially in light of the significant fluctuations seen in certain ratios in the past.

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Coverage ratios

The interest coverage ratio measures a company's ability to pay its interest expenses on outstanding debt with its operating income. A higher interest coverage ratio indicates a better ability to cover interest obligations.

Based on the provided data:
- Gen Digital Inc.'s interest coverage has fluctuated over the past five years, ranging from a low of 1.68 in 2024 to a high of 7.98 in 2022.
- The interest coverage ratio for 2023 and 2021 was 3.06 and 6.22, respectively, indicating a moderate ability to cover interest expenses during those years.
- In 2020 and 2024, the interest coverage ratios were 1.81 and 1.68, respectively, which suggest a lower ability to cover interest obligations compared to the other years.
- Notably, the interest coverage ratio sharply declined from 2022 to 2024, indicating a potential decrease in the company's ability to cover its interest expenses compared to the previous year.

Overall, Gen Digital Inc.'s interest coverage ratio has shown variability in its ability to meet its interest obligations over the past five years. Further analysis of the company's financial health and operational performance may be warranted to understand the factors influencing these fluctuations.