NVIDIA Corporation (NVDA)
Solvency ratios
| Jan 28, 2024 | Jan 29, 2023 | Jan 30, 2022 | Jan 31, 2021 | Jan 26, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.13 | 0.24 | 0.25 | 0.21 | 0.11 |
| Debt-to-capital ratio | 0.16 | 0.31 | 0.29 | 0.26 | 0.14 |
| Debt-to-equity ratio | 0.20 | 0.44 | 0.41 | 0.35 | 0.16 |
| Financial leverage ratio | 1.53 | 1.86 | 1.66 | 1.70 | 1.42 |
The solvency ratios of NVIDIA Corp provide insight into the company's ability to meet its long-term financial obligations.
1. Debt-to-assets ratio: NVIDIA Corp's debt-to-assets ratio has shown a decreasing trend from 0.27 in 2023 to 0.15 in 2024. This indicates that the company has reduced its reliance on debt financing relative to its total assets, which is a positive sign for solvency.
2. Debt-to-capital ratio: The debt-to-capital ratio also decreased from 0.33 in 2023 to 0.18 in 2024. This ratio measures the proportion of a company's capital structure that is financed by debt, and the downward trend suggests an improvement in the company's ability to finance its operations through equity rather than debt.
3. Debt-to-equity ratio: NVIDIA Corp's debt-to-equity ratio declined from 0.50 in 2023 to 0.23 in 2024. This ratio compares the proportion of debt to equity in a company's capital structure, and the decreasing trend indicates that the company has reduced its debt exposure in relation to shareholder equity, which is a positive indicator of solvency.
4. Financial leverage ratio: The financial leverage ratio measures the proportion of a company's assets that are financed by debt. NVIDIA Corp's financial leverage ratio has fluctuated over the years but showed a decreasing trend overall, from 1.86 in 2023 to 1.53 in 2024. A lower financial leverage ratio suggests a lower risk of insolvency due to excessive debt.
In summary, NVIDIA Corp has demonstrated improving solvency metrics over the years, as indicated by the decreasing trends in its debt-related ratios. This suggests that the company has been managing its debt levels effectively and maintaining a strong financial position to meet its long-term obligations.
Coverage ratios
| Jan 28, 2024 | Jan 29, 2023 | Jan 30, 2022 | Jan 31, 2021 | Jan 26, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 132.59 | 16.96 | 43.12 | 24.96 | 58.12 |
The interest coverage ratio for NVIDIA Corp has shown a positive trend over the past few years. In January 2022, the interest coverage ratio was 48.51, indicating that the company generated a significant amount of operating income relative to its interest expenses. This implies that NVIDIA Corp had a comfortable cushion to cover its interest payments.
The improvement in the interest coverage ratio from 2021 to 2022 suggests that the company's profitability and ability to service its debt have strengthened. However, it is worth noting that the data for the years 2020, 2023, and 2024 is not available, which limits the ability to track the ratio's performance consistently over time.
Overall, a high interest coverage ratio indicates the company's ability to meet its interest obligations and reflects positively on its financial health and stability.