NetScout Systems Inc (NTCT)
Solvency ratios
| Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.04 | 0.04 | 0.11 | 0.11 | 0.14 |
| Debt-to-capital ratio | 0.05 | 0.05 | 0.15 | 0.15 | 0.19 |
| Debt-to-equity ratio | 0.05 | 0.05 | 0.17 | 0.17 | 0.23 |
| Financial leverage ratio | 1.37 | 1.39 | 1.55 | 1.54 | 1.61 |
The solvency ratios of NetScout Systems Inc show a favorable trend over the past five years. The debt-to-assets ratio has decreased from 0.14 in 2020 to 0.04 in 2024, indicating that the company's reliance on debt to finance its assets has decreased significantly.
Similarly, the debt-to-capital and debt-to-equity ratios have also shown a decreasing trend over the same period, from 0.19 to 0.05 and 0.23 to 0.05 respectively. These ratios suggest that NetScout Systems Inc has been reducing its debt relative to its capital and equity, which is a positive sign of financial health and stability.
Furthermore, the financial leverage ratio has also improved steadily from 1.61 in 2020 to 1.37 in 2024. This indicates that the company's level of financial leverage has decreased over the years, implying a lower risk of financial distress and insolvency.
Overall, the solvency ratios of NetScout Systems Inc demonstrate a prudently managed capital structure with decreasing levels of debt relative to assets, capital, and equity, which bodes well for the company's long-term financial stability and ability to meet its financial obligations.
Coverage ratios
| Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | -15.70 | 7.68 | 6.33 | 3.05 | 1.09 |
NetScout Systems Inc's interest coverage ratio has fluctuated significantly over the past five years. In the most recent fiscal year ending March 31, 2024, the interest coverage ratio was -15.70, indicating that the company's operating income was insufficient to cover its interest expense, raising concerns about its ability to meet debt obligations. This represents a sharp decline from the previous year's ratio of 7.68, where the company's operating income was more than sufficient to cover its interest expense.
The trend over the five-year period shows improvement in the interest coverage ratio, with increases from 1.09 in March 31, 2020, to 6.33 in March 31, 2022. However, the significant drop in the most recent year raises red flags regarding the company's financial health and ability to manage debt effectively. Investors and creditors may view this as a concerning indicator of the company's financial stability and solvency. Management should closely monitor and address the factors contributing to this decline to ensure sustainable financial performance in the future.