Guidewire Software Inc (GWRE)
Solvency ratios
| Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | Jul 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.20 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.25 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.33 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 1.66 | 1.69 | 1.56 | 1.50 | 1.43 |
Guidewire Software Inc has maintained a consistently low Debt-to-assets ratio, Debt-to-capital ratio, and Debt-to-equity ratio from July 31, 2020, to July 31, 2022, indicating a minimal reliance on debt financing to support its operations. However, there was a slight increase in the Debt-to-assets and Debt-to-capital ratios in July 31, 2023, suggesting a higher proportion of assets and capital funded by debt.
The Financial leverage ratio has shown an overall increasing trend from 1.43 in July 31, 2020, to 1.66 in July 31, 2024. This indicates a slight increase in financial leverage over the years, which may suggest a shift towards greater utilization of debt to finance the company's operations.
Overall, Guidewire Software Inc's solvency ratios demonstrate a conservative approach to debt management, but the slight uptick in leverage ratios in recent years may warrant attention to ensure sustainable financial health in the future.
Coverage ratios
| Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | Jul 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | -7.80 | -22.26 | -10.26 | -5.64 | -1.33 |
The interest coverage ratio measures a company's ability to cover its interest expenses with its operating income. A ratio below 1 indicates that the company is not generating enough operating income to meet its interest obligations.
For Guidewire Software Inc, the interest coverage ratios have been consistently negative over the years, with values of -1.33 in July 31, 2020, -5.64 in July 31, 2021, -10.26 in July 31, 2022, -22.26 in July 31, 2023, and -7.80 in July 31, 2024.
These negative values suggest that Guidewire Software Inc has not been able to cover its interest expenses with its operating income. A sustained trend of negative interest coverage ratios raises concerns about the company's financial stability and ability to meet its debt obligations. It indicates a high risk for lenders and investors, signaling potential challenges in servicing debt and meeting financial commitments. Guidewire Software Inc may need to improve its operational performance or consider restructuring its debt to enhance its financial health.