KLA-Tencor Corporation (KLAC)
Solvency ratios
| Jun 30, 2025 | Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 3.42 | 4.58 | 4.82 | 8.99 | 3.04 |
The analysis of KLA-Tencor Corporation's solvency ratios, based on the provided data, indicates a consistent absence of debt across the period from June 2021 through June 2025. The debt-to-assets ratio, debt-to-capital ratio, and debt-to-equity ratio are all reported as zero throughout this timeframe, suggesting that the company employs little to no debt financing and maintains a fully equity-financed capital structure.
This debt-free profile signifies that KLA-Tencor has not relied on leverage, thereby reducing its financial risk associated with debt obligations. The absence of debt also implies lower interest expense, contributing positively to net income and cash flows. It is indicative of a conservative capital structure with a focus on internal funding sources.
The financial leverage ratio, which measures the extent to which a company's assets are financed through debt relative to equity, exhibits variability over the analyzed period. It starts at 3.04 in June 2021, sharply increases to 8.99 in June 2022, then decreases to 4.82 in June 2023, with further declines to 4.58 and 3.42 in subsequent years. Since the debt ratios are zero, the leverage ratio's calculations are likely based on other financial metrics, such as total assets and equity, rather than debt levels. The fluctuation suggests changes in asset composition or equity levels that influence leverage calculations.
In summary, KLA-Tencor appears to maintain a solvent position characterized by an absence of indebtedness, which minimizes financial risk. The variable financial leverage ratio reflects shifts in asset or equity structure but does not indicate increasing financial leverage or reliance on debt. Consequently, the company's solvency profile remains robust over the analyzed period, supported by a fully equity-financed structure and low financial risk exposure.
Coverage ratios
| Jun 30, 2025 | Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | |
|---|---|---|---|---|---|
| Interest coverage | 0.00 | 11.26 | 13.76 | 22.76 | 16.00 |
The interest coverage ratios of KLA-Tencor Corporation over the specified periods reveal a notable fluctuation in the company's ability to meet its interest obligations. As of June 30, 2021, the interest coverage stood at 16.00, indicating a robust capacity to service interest expenses, with earnings significantly exceeding interest obligations. This ratio increased to 22.76 by June 30, 2022, further strengthening the company's financial resilience in covering interest costs.
However, a notable decline is observed in subsequent years. By June 30, 2023, the interest coverage decreased to 13.76, suggesting a reduction in earnings relative to interest expenses but still reflecting a comfortable margin of coverage. The downward trend continued into June 30, 2024, with the ratio dropping to 11.26, which, while lower, still signifies an adequate cushion above the typical safety threshold.
A critical change occurs in the projected outlook for June 30, 2025, where the interest coverage ratio falls to zero. This suggests that, based on the data, the company's earnings are expected to be insufficient to cover interest expenses, potentially indicating an impending inability to meet interest obligations without external support or restructuring. Such an outcome warrants careful monitoring of the company's earnings trajectory and debt management strategies in the near future.