Jacobs Solutions Inc. (J)

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

The debt-to-assets ratio has shown a decreasing trend over the past five years, indicating that Jacobs Solutions Inc. has been able to reduce its reliance on debt to finance its assets. This suggests a positive development in the company's solvency position as a lower debt-to-assets ratio implies lower financial risk.

Similarly, the debt-to-capital ratio has also exhibited a downward trend, which signifies that the proportion of the company's capital structure funded by debt has been decreasing. This is a favorable trend as it indicates a healthier balance between debt and equity financing.

The debt-to-equity ratio reflects a decreasing trend as well, implying that Jacobs Solutions Inc. has been gradually reducing its reliance on debt and increasing its use of equity financing. A lower debt-to-equity ratio is generally perceived positively as it indicates a lower financial risk and better financial health.

Lastly, the financial leverage ratio has been fluctuating over the years but has generally shown an increasing trend. This ratio measures the extent to which the company's operations are funded by debt, and an increasing ratio suggests a higher level of financial risk. Therefore, Jacobs Solutions Inc. may need to carefully monitor and manage its debt levels to maintain a healthy solvency position.

Overall, the decreasing trends in the debt-to-assets, debt-to-capital, and debt-to-equity ratios signal an improvement in Jacobs Solutions Inc.'s solvency position, while the fluctuating financial leverage ratio warrants attention to ensure optimal debt management and sustainable financial health.

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Coverage ratios

Interest coverage is a financial ratio that indicates a company's ability to meet its interest obligations on outstanding debt. Jacobs Solutions Inc.'s interest coverage has shown a declining trend over the past five years, decreasing from 11.34 in 2021 to 5.14 in 2024. This indicates that the company's ability to cover its interest expenses with its earnings has weakened over time.

A higher interest coverage ratio is generally seen as favorable, as it demonstrates that the company is generating sufficient operating income to cover its interest expenses. However, a declining interest coverage ratio could signal that Jacobs Solutions Inc. may be facing challenges in meeting its interest payments from its operating profits.

It's important for investors and creditors to closely monitor Jacobs Solutions Inc.'s interest coverage ratio to assess the company's financial health and debt repayment capacity. A consistent decline in this ratio could raise concerns about the company's ability to service its debt in the long run.