Maximus Inc (MMS)

Solvency ratios are key indicators of a company's ability to meet its long-term financial obligations. Looking at the solvency ratios of Maximus Inc over the past five years, we can observe the following trends:

1. Debt-to-assets ratio: This ratio measures the proportion of a company's assets financed by debt. Maximus Inc has shown a decreasing trend in this ratio, from 0.35 in 2021 to 0.26 in 2024. This reflects a positive sign as the company is relying less on debt to fund its assets.

2. Debt-to-capital ratio: This ratio indicates the extent to which both debt and equity contribute to a company's capital structure. Maximus Inc has also shown a decreasing trend in this ratio, from 0.49 in 2021 to 0.37 in 2024. Again, this suggests a decreasing reliance on debt for financing its operations.

3. Debt-to-equity ratio: This ratio shows the relative amount of debt and equity used to finance a company's assets. Maximus Inc's debt-to-equity ratio has decreased from 0.97 in 2021 to 0.59 in 2024. A lower debt-to-equity ratio is generally considered favorable as it indicates lower financial risk.

4. Financial leverage ratio: This ratio measures how much debt a company uses to finance its assets relative to equity. Maximus Inc's financial leverage ratio has shown a decreasing trend, indicating a reduction in financial risk. The ratio decreased from 2.78 in 2021 to 2.24 in 2024.

Overall, the solvency ratios of Maximus Inc have improved over the years, with decreased reliance on debt for financing its operations and a more balanced capital structure. These trends suggest that Maximus Inc has been managing its long-term financial obligations more effectively, which can enhance its financial stability and sustainability in the long run.

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Coverage ratios

Interest coverage ratio measures a company's ability to cover its interest expenses with its operating income. A higher interest coverage ratio indicates a stronger ability to fulfill interest obligations.

Looking at Maximus Inc's interest coverage over the past five years, we observe a fluctuating trend. In 2020, the interest coverage ratio was significantly high at 140.42, indicating a robust ability to cover interest expenses. However, this ratio experienced a sharp decline in the following years, dropping to 27.71 in 2021, 7.09 in 2022, and 3.50 in 2023.

The interest coverage ratio improved in 2024 to 5.93 but remains lower than the levels seen in 2020. This suggests that Maximus Inc's ability to cover interest expenses has improved from the previous year but has not yet reached the exceptionally high levels of 2020.

Overall, while the recent improvement in interest coverage is positive, it would be important for Maximus Inc to continue monitoring and managing its interest expenses to ensure a sustainable level of coverage in the future.