McKesson Corporation (MCK)
Solvency ratios
| Mar 31, 2025 | Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | — | — | — | — | — |
| Debt-to-equity ratio | — | — | — | — | — |
| Financial leverage ratio | — | — | — | — | — |
Based on the provided data, McKesson Corporation's solvency ratios demonstrate a consistently low level of debt relative to its assets, capital, and equity over the five-year period from March 31, 2021, to March 31, 2025.
- Debt-to-assets ratio: McKesson has maintained a debt-to-assets ratio of 0.00 throughout the period, indicating that the company has not relied heavily on debt financing to fund its operations or investments. This suggests that McKesson's assets are primarily financed through equity.
- Debt-to-capital ratio: The data shows "—" (not available) for the debt-to-capital ratio. Without this specific ratio, it is challenging to assess the proportion of debt in relation to the company's total capital structure.
- Debt-to-equity ratio: Similar to the debt-to-capital ratio, the debt-to-equity ratio is also not available ("—"). Consequently, an evaluation of the extent to which debt contributes to McKesson's capitalization relative to equity is not possible based on the provided data.
- Financial leverage ratio: The financial leverage ratio is denoted as "—" throughout the period, making it difficult to assess the degree to which McKesson utilizes debt to finance its operations and activities.
Overall, based on the information provided, it can be inferred that McKesson Corporation has maintained a conservative debt structure with minimal debt relative to its assets, capital, and equity, suggesting a strong financial position and lower financial risk.
Coverage ratios
| Mar 31, 2025 | Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | |
|---|---|---|---|---|---|
| Interest coverage | 17.45 | 16.00 | 19.67 | 11.83 | -22.20 |
The interest coverage ratio is a financial metric used to evaluate a company's ability to cover its interest expenses with its operating income. An interest coverage ratio below 1 indicates that the company is not generating enough income to cover its interest expenses, which can be a cause for concern as it may lead to financial distress.
Based on the data provided for McKesson Corporation, the interest coverage ratio for March 31, 2021, was -22.20, indicating that the company's operating income was insufficient to cover its interest expenses, raising red flags about its financial health during that period.
The subsequent years show an improvement in McKesson's interest coverage ratio, with values of 11.83 for March 31, 2022, 19.67 for March 31, 2023, 16.00 for March 31, 2024, and 17.45 for March 31, 2025. These positive trends suggest that the company's ability to cover its interest expenses improved significantly over the years, indicating a better financial position and reduced risk of default.
Overall, the upward trend in McKesson Corporation's interest coverage ratio over the years demonstrates an enhancement in its ability to meet its interest obligations from operating profits, reflecting improved financial stability and a healthier financial position.