GMS Inc (GMS)

Solvency ratios

	Apr 30, 2024	Jan 31, 2024	Oct 31, 2023	Jul 31, 2023	Apr 30, 2023	Jan 31, 2023	Oct 31, 2022	Jul 31, 2022	Apr 30, 2022	Jan 31, 2022	Oct 31, 2021	Jul 31, 2021	Apr 30, 2021	Jan 31, 2021	Oct 31, 2020	Jul 31, 2020	Apr 30, 2020	Jan 31, 2020	Oct 31, 2019	Jul 31, 2019
Debt-to-assets ratio	0.00	0.30	0.31	0.32	0.32	0.36	0.36	0.37	0.37	0.42	0.38	0.38	0.38	0.42	0.43	0.45	0.45	0.45	0.46	0.49
Debt-to-capital ratio	0.00	0.41	0.43	0.44	0.45	0.49	0.50	0.51	0.52	0.56	0.53	0.54	0.53	0.55	0.57	0.59	0.62	0.59	0.60	0.63
Debt-to-equity ratio	0.00	0.69	0.75	0.77	0.82	0.95	0.99	1.05	1.07	1.28	1.12	1.16	1.13	1.24	1.32	1.46	1.65	1.44	1.51	1.68
Financial leverage ratio	2.57	2.31	2.41	2.44	2.56	2.63	2.74	2.82	2.92	3.08	2.97	3.04	3.02	2.96	3.08	3.26	3.67	3.17	3.28	3.43

GMS Inc's solvency ratios show a fluctuating trend over the historical period provided. The debt-to-assets ratio has ranged from 0.00 to as high as 0.49, indicating the proportion of the company's assets financed by debt. It has generally increased over time, which may signify a higher reliance on debt to fund assets.

The debt-to-capital ratio reflects the proportion of the company's capital that comes from debt. This ratio has also shown an upward trend, reaching a peak of 0.63. This suggests that the company has been increasingly using debt as a source of funding compared to equity.

Furthermore, the debt-to-equity ratio, which indicates the extent to which debt is used to finance the company's operations relative to equity, has witnessed a similar rising pattern. The ratio has moved from 0.00 to 1.68, demonstrating a significant increase in debt utilization compared to equity.

The financial leverage ratio has been on the rise as well, indicating an increase in the company's financial leverage or its ability to generate higher returns on equity through the use of debt. The ratio has shown volatility, peaking at 3.67, which may suggest a higher level of financial risk associated with the company's capital structure.

Overall, the upward trend in these solvency ratios implies an increasing reliance on debt for financing within GMS Inc. This may indicate a need for close monitoring of the company's debt levels and associated risks to ensure sustainable financial health and stability.

Coverage ratios

	Apr 30, 2024	Jan 31, 2024	Oct 31, 2023	Jul 31, 2023	Apr 30, 2023	Jan 31, 2023	Oct 31, 2022	Jul 31, 2022	Apr 30, 2022	Jan 31, 2022	Oct 31, 2021	Jul 31, 2021	Apr 30, 2021	Jan 31, 2021	Oct 31, 2020	Jul 31, 2020	Apr 30, 2020	Jan 31, 2020	Oct 31, 2019	Jul 31, 2019
Interest coverage	5.96	6.22	6.61	7.27	7.80	8.30	8.39	7.86	7.28	6.37	5.45	4.40	3.55	2.04	1.85	1.80	1.68	2.43	2.28	2.20

Over the past few years, GMS Inc's interest coverage ratio has exhibited fluctuations. The interest coverage ratio measures a company's ability to meet its interest obligations from its operating earnings.

Starting from the most recent data in April 2024, the interest coverage ratio stood at 5.96, indicating that the company's operating earnings were able to cover its interest expenses about 5.96 times over. This represents a slight decrease from the previous period in January 2024 where the ratio was 6.22.

Looking further back, the interest coverage ratio has generally shown a declining trend since July 2021. This could signal potential challenges in meeting interest payments from operating earnings over time. It's worth noting that the interest coverage ratio hit a low point of 1.68 in July 2020, which might have indicated financial distress at that time.

Overall, GMS Inc's interest coverage ratio has fluctuated significantly over the recent quarters, reflecting changes in the company's operating profitability and its ability to service its debt. An interest coverage ratio below 1 suggests that the company is not generating enough operating income to cover its interest expenses, posing a higher risk of default. Investors and creditors should closely monitor GMS Inc's ability to generate sufficient earnings to cover its interest obligations in the future.