MACOM Technology Solutions Holdings Inc (MTSI)

MACOM Technology Solutions Holdings Inc's solvency ratios indicate the company's ability to meet its financial obligations and the extent of its leverage.

The debt-to-assets ratio has shown a declining trend over the years, decreasing from 0.57 in 2020 to 0.26 in 2024, indicating that the company has been reducing its reliance on debt to finance its assets, which is a positive sign for solvency.

Similarly, the debt-to-capital ratio has also decreased gradually from 0.68 in 2020 to 0.28 in 2024, demonstrating that the company is relying less on debt and more on equity to finance its operations.

The debt-to-equity ratio has exhibited a significant improvement from 2.17 in 2020 to 0.40 in 2024. This substantial reduction signifies that the company's debt levels are becoming more manageable compared to its equity, implying a lower financial risk.

Finally, the financial leverage ratio has decreased from 3.82 in 2020 to 1.56 in 2024, suggesting that the company has been successful in reducing its overall financial leverage and is operating with a lower level of debt relative to its equity.

Overall, the trend in MACOM Technology Solutions Holdings Inc's solvency ratios indicates an enhancement in the company's financial health and reduced risk of default.

---

Coverage ratios

Interest coverage is a key financial ratio that indicates a company's ability to meet its interest payment obligations. A higher interest coverage ratio suggests a stronger ability to cover interest expenses with operating income. Looking at the historical trend for MACOM Technology Solutions Holdings Inc, we observe significant fluctuations in the interest coverage ratio over the past five years.

In Sep 30, 2024, MACOM's interest coverage ratio stands at 18.82, indicating that the company generated 18.82 times the operating income necessary to cover its interest expenses for the period. This represents a strong improvement compared to the previous year and suggests a healthy financial position.

In Sep 30, 2023, the interest coverage ratio was 10.30, showing a moderate ability to cover interest expenses. However, there was a significant improvement in Sep 30, 2022, with an interest coverage ratio of 29.43, indicating a robust ability to meet interest obligations comfortably.

In Sep 30, 2021, the interest coverage ratio declined to 2.95, reflecting a lower capacity to cover interest payments with operating income. Moreover, in Sep 30, 2020, the interest coverage ratio was negative at -0.52, implying that the company's operating income was insufficient to cover its interest expenses during that period.

Overall, the fluctuating trend in MACOM's interest coverage ratio suggests varying levels of financial stability and performance. It is important for investors and analysts to monitor this ratio closely to assess the company's ability to handle its debt obligations and manage financial risk effectively.