Jabil Circuit Inc (JBL)

The solvency ratios of Jabil Circuit Inc indicate the company's ability to meet its long-term financial obligations. Looking at the trend over the past five years:

1. Debt-to-assets ratio: The ratio has fluctuated between 0.13 and 0.19, with a current value of 0.17 in 2024. This suggests that 17% of the company's total assets are financed by debt, indicating a relatively stable and conservative approach to leverage.

2. Debt-to-capital ratio: Jabil's debt-to-capital ratio has ranged from 0.50 to 0.62 over the past five years. In 2024, the ratio stands at 0.62. This implies that 62% of the company's capital structure is funded by debt, showing a moderate increase in reliance on debt financing compared to previous years.

3. Debt-to-equity ratio: The debt-to-equity ratio has shown varying levels of leverage, ranging from 1.00 to 1.66 over the past five years. The ratio increased to 1.66 in 2024, indicating that the company is using more debt financing relative to equity to support its operations.

4. Financial leverage ratio: The financial leverage ratio has fluctuated between 6.78 and 9.99 over the past five years, with a current value of 9.99 in 2024. This ratio represents the extent to which the company is using debt to finance its assets. The upward trend in this ratio indicates increased financial risk and leverage.

In summary, Jabil Circuit Inc has maintained a relatively stable debt-to-assets ratio, but has seen an increase in its debt-to-capital, debt-to-equity, and financial leverage ratios in 2024. This suggests that the company may be taking on more debt to support its operations, which could lead to increased financial risk and interest expenses. It will be important for the company to effectively manage its debt levels to ensure long-term solvency and financial stability.

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Coverage ratios

The interest coverage ratio of Jabil Circuit Inc has shown fluctuations over the past five years. In 2024, the interest coverage ratio stands at 11.64, indicating that the company generated 11.64 times the operating income compared to its interest expenses for the fiscal year ending August 31, 2024. This is a significant decrease compared to the ratio of 170.78 in 2023, suggesting a decline in the company's ability to cover its interest payments.

Moreover, the interest coverage ratio in 2024 is still higher than in 2022 and 2021 when it was 9.15 and 8.25, respectively. This implies that Jabil Circuit Inc's ability to meet its interest obligations improved in 2024 compared to the previous two years but remains below the exceptional level seen in 2023.

Furthermore, the interest coverage ratio in 2020 was 2.48, highlighting a substantial improvement over the years, indicating better financial health and a stronger ability to cover interest expenses by generating operating income.

Overall, while the interest coverage ratio of Jabil Circuit Inc has fluctuated over the past five years, the company's ability to meet its interest obligations has generally improved, with some variability in performance observed year-on-year.