McKesson Corporation (MCK)
Solvency ratios
| Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.09 | 0.09 | 0.00 | 0.10 | 0.00 | 0.09 | 0.11 | 0.10 | 0.11 | 0.12 | 0.12 |
| Debt-to-capital ratio | — | — | — | — | — | — | — | — | — | 1.30 | 1.11 | — | 1.00 | — | 0.50 | 0.54 | 0.55 | 0.52 | 0.53 | 0.48 |
| Debt-to-equity ratio | — | — | — | — | — | — | — | — | — | — | — | — | — | — | 0.99 | 1.17 | 1.24 | 1.09 | 1.13 | 0.94 |
| Financial leverage ratio | — | — | — | — | — | — | — | — | — | — | — | — | — | — | 10.45 | 10.59 | 12.03 | 9.86 | 9.10 | 7.83 |
The solvency ratios of McKesson Corporation, as indicated by the debt-to-assets, debt-to-capital, debt-to-equity, and financial leverage ratios, demonstrate a consistent and stable financial position. Over the analyzed period, the debt-to-assets ratio remained consistently low at 0.00%, indicating that the company's assets are primarily financed through equity rather than debt.
Similarly, the debt-to-capital ratio remained relatively stable and low, fluctuating within a narrow range around 0.50 to 1.30. This suggests that McKesson Corporation relies more on equity financing than on debt to fund its operations and investments.
The debt-to-equity ratio, which shows the proportion of debt used to finance the company's operations compared to equity, exhibited a moderate level of leverage ranging from 0.50 to 1.24. This indicates a balanced approach to financing, with a reasonable mix of debt and equity in the capital structure.
Lastly, the financial leverage ratio, which measures the extent to which a company uses debt to finance its assets, showed a consistently high level over the analyzed period. The ratio ranged from 7.83 to 12.03, reflecting the company's reliance on debt to support its operations and investments.
Overall, the solvency ratios of McKesson Corporation suggest a prudent and stable financial strategy, with a focus on maintaining a healthy balance between debt and equity financing to support its business activities.
Coverage ratios
| Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 15.41 | 14.52 | 17.52 | 19.20 | 19.00 | 20.72 | 17.32 | 13.67 | 10.83 | 12.30 | -26.58 | -24.91 | -23.22 | -12.64 | 7.11 | 8.15 | 10.00 | 14.40 | 9.88 | 7.04 |
The interest coverage ratio of McKesson Corporation has fluctuated over the past few quarters. The ratio measures the company's ability to meet its interest payments on outstanding debt from its operating income. A higher interest coverage ratio indicates that the company is more capable of servicing its debt obligations.
From March 2021 to March 2023, McKesson Corporation's interest coverage ratio remained generally strong, ranging from around 15 to 20. This suggests that the company had sufficient operating income to cover its interest expenses comfortably during this period.
However, in the most recent quarters of September 2021 to March 2022, the interest coverage ratio took a significant dip, falling into negative territory. This indicates that McKesson Corporation's operating income was not sufficient to cover its interest payments during this period. Negative interest coverage ratios can raise concerns about the company's financial health and ability to service its debt obligations.
It is important for investors and analysts to closely monitor the company's interest coverage ratio over time to ensure that McKesson Corporation can maintain its ability to meet its interest payments and manage its debt effectively. Additionally, a negative interest coverage ratio may indicate a need for further scrutiny and potentially a reevaluation of the company's financial strategy.