Jacobs Solutions Inc. (J)

The solvency ratios of Jacobs Solutions Inc. provide insight into the company's ability to meet its long-term debt obligations and the extent to which it relies on debt financing.

The debt-to-assets ratio measures the proportion of the company's assets financed by debt. Jacobs Solutions Inc. has maintained a relatively stable debt-to-assets ratio over the past five years, ranging from 0.10 in 2019 to 0.23 in 2022. The ratio decreased to 0.19 in 2023, indicating that the company has reduced its reliance on debt to finance its assets.

The debt-to-capital ratio reflects the proportion of the company's capital structure that is funded by debt. Jacobs Solutions Inc.'s debt-to-capital ratio has fluctuated over the years, with a downward trend observed from 0.17 in 2019 to 0.30 in 2023. This suggests that the company has increased its use of equity financing relative to debt financing.

The debt-to-equity ratio compares the amount of debt to the amount of equity in the company's capital structure. Jacobs Solutions Inc. has shown a decreasing trend in the debt-to-equity ratio over the past five years, indicating a reduction in financial leverage and a stronger equity position. The ratio declined from 0.21 in 2019 to 0.43 in 2023, reflecting a more conservative approach to debt.

Lastly, the financial leverage ratio measures the extent to which the company uses debt to fund its operations. Jacobs Solutions Inc. has shown a fluctuating trend in its financial leverage ratio, with an overall increase from 2.01 in 2019 to 2.23 in 2023. This suggests that the company has become slightly more leveraged in recent years, although the ratio remains within a reasonable range.

Overall, Jacobs Solutions Inc. has displayed prudent management of its solvency ratios by maintaining a balanced mix of debt and equity financing, reducing its reliance on debt, and strengthening its equity position over time.

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Coverage ratios

The interest coverage ratio for Jacobs Solutions Inc. has exhibited a declining trend over the past five years. The ratio decreased from 11.55 in 2019 to 6.13 in 2023. This indicates that the company's ability to cover its interest expenses with its operating income has weakened over the period. Despite the downward trend, Jacobs Solutions Inc. still maintains a relatively healthy interest coverage ratio above 1, which suggests that the company is generating sufficient earnings to meet its interest obligations. However, the decreasing trend should prompt further investigation into the company's financial health and sustainability of its current operating performance.