Lam Research Corp (LRCX)
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 | 2.16 | 2.20 | 2.29 | 2.74 | 2.64 |
The analysis of Lam Research Corp’s solvency ratios based on the provided data reveals a consistent pattern indicative of a company with minimal or no reliance on debt financing.
The debt-to-assets ratio remains at zero across all observed periods from June 30, 2021, through June 30, 2025. This suggests that the company’s total assets are fully financed through equity, with no recorded debt obligations, reflecting an extremely conservative capital structure or possibly a lack of applicable debt on the balance sheet during this timeframe.
Similarly, the debt-to-capital ratio also remains at zero throughout the same period, reaffirming that the company has not employed debt within its capital structure. This ratio emphasizes that all capital employed in the company is equity-based, further indicating a debt-free status.
The debt-to-equity ratio mirrors this trend, remaining at zero across the five-year span, which confirms that the company’s shareholders' equity constitutes 100% of the capital structure, with no leverage provided by debt.
In contrast, the financial leverage ratio shows a gradual decline from 2.64 in June 2021 to 2.16 in June 2025. This ratio, typically reflecting the proportion of assets financed by shareholders’ equity relative to liabilities, indicates a decreasing leverage effect, consistent with the absence of debt. Given the ratios are above 2 in all periods, this points to a significant use of equity in financing assets, with leverage largely shaped by internal capital rather than external debt.
Overall, the data portrays Lam Research Corp as a company operating with a highly conservative, debt-free capital structure over the analyzed period. The decreasing trend in the financial leverage ratio suggests a marginal reduction in reliance on financial leverage, aligning with the other ratios indicating no debt. This positions the company as financially stable from a solvency perspective, with no immediate liabilities related to debt obligations, thereby mitigating liquidity and solvency risks associated with leverage.
Coverage ratios
| Jun 30, 2025 | Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | |
|---|---|---|---|---|---|
| Interest coverage | — | 24.54 | 28.40 | 29.13 | 21.49 |
The interest coverage ratios of Lam Research Corp over the analyzed period, as provided, demonstrate a consistently strong capacity to meet interest obligations. As of June 30, 2021, the ratio stood at 21.49, indicating that the company's earnings before interest and taxes (EBIT) were more than twenty-one times sufficient to cover interest expenses. This robust coverage ratio was further strengthened in the subsequent year, reaching 29.13 on June 30, 2022, reflecting an improved ability to service interest obligations with even greater safety margin.
Although the ratio experienced a slight decline to 28.40 by June 30, 2023, it remained at a high level, signifying maintenance of substantial interest coverage. The ratio then decreased further to 24.54 by June 30, 2024, yet still indicated a healthy margin of safety for interest payments. Notably, the data for June 30, 2025, is unavailable or not provided, which precludes analysis of that year’s coverage ratio.
Overall, the trend suggests that Lam Research Corp maintained a consistently high interest coverage ratio throughout the period from 2021 to 2024. These figures imply that the company's earnings were ample relative to interest expenses, signaling a low risk of distress related to interest payments. The observed fluctuations may reflect changes in earnings or interest expense levels, but the ratios remain well above typical concern thresholds, often considered to be around 3 to 5.