McKesson Corporation (MCK)
Solvency ratios
| Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.10 | 0.10 |
| Debt-to-capital ratio | — | — | — | 1.00 | 0.55 |
| Debt-to-equity ratio | — | — | — | — | 1.24 |
| Financial leverage ratio | — | — | — | — | 12.03 |
Based on the solvency ratios of McKesson Corporation for the past five fiscal years, it appears that the company has maintained a consistently low level of indebtedness relative to its assets. The debt-to-assets ratio has remained at 0.00% during the last three years, indicating that the company's total debt is negligible compared to the total value of its assets.
The debt-to-capital ratio was not provided for the years shown, but the debt-to-equity ratio decreased significantly from 1.24 in 2020 to not being reported in the subsequent years. This suggests that McKesson has been actively reducing its reliance on debt financing in favor of equity financing, which can contribute to a more stable financial structure.
Additionally, the financial leverage ratio, which measures the extent to which a company is using debt to finance its operations, was exceptionally high at 12.03 in 2020. However, this ratio was not reported for the subsequent years, making it difficult to assess the trend in leverage.
Overall, based on the available data, it appears that McKesson Corporation has managed its solvency well by keeping its debt levels low compared to its assets, transitioning towards a lower debt-to-equity ratio, and potentially reducing its financial leverage over time.
Coverage ratios
| Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 15.41 | 19.00 | 10.83 | -23.12 | 4.69 |
The interest coverage ratio of McKesson Corporation has shown variability over the past five years. The ratio was strong and stable in 2023 and 2024, with values of 19.00 and 15.41 respectively, indicating that the company generated more than enough operating income to cover its interest expenses during those years. However, in 2021, the interest coverage ratio was negative at -23.12, suggesting that the company's operating income was insufficient to cover its interest expenses, raising concerns about its financial health and ability to meet debt obligations. This negative trend was reversed in 2022 and 2020, with ratios of 10.83 and 4.69 respectively, indicating an improvement in the company's ability to cover interest expenses. Further analysis is needed to understand the factors contributing to the significant fluctuations in the interest coverage ratio over the years.