Nextracker Inc. Class A Common Stock (NXT)

The solvency ratios of Nextracker Inc. Class A Common Stock provide insights into the company's financial leverage and ability to meet its long-term obligations.

The debt-to-assets ratio, which represents the proportion of the company's assets financed by debt, has shown a decreasing trend from 0.10 in September 2023 to 0.06 in March 2024. This indicates that the company is relying less on debt financing to support its operations and growth.

The debt-to-capital ratio, which is not available for Dec 31, 2023 and Sep 30, 2023, was reported as 0.13 on March 31, 2024. This ratio reflects the percentage of the company's capital that is financed through debt. A lower debt-to-capital ratio suggests a conservative capital structure and reduced financial risk.

The debt-to-equity ratio, also not available for the last two periods, stood at 0.15 as of March 31, 2024. This metric compares the company's total debt to its shareholder equity, indicating the extent to which debt is used to finance the company's operations. A lower debt-to-equity ratio implies a lower financial risk and greater equity cushion for creditors.

The financial leverage ratio, which provides an overall measure of the company's debt relative to its equity, was calculated as 2.62 as of March 31, 2024, indicating that the company's operations are primarily financed through equity rather than debt. A decreasing trend in this ratio would suggest a strengthening financial position and reduced reliance on borrowed funds.

In summary, the solvency ratios of Nextracker Inc. Class A Common Stock reflect prudent debt management practices, with decreasing values in the debt-to-assets ratio and a modest financial leverage ratio. These trends indicate improved solvency and reduced financial risk for the company.

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Coverage ratios

The interest coverage ratio for Nextracker Inc. Class A Common Stock has shown a consistent improvement over the three most recent quarters. The ratio increased from 161.56 in September 2023 to 215.86 in December 2023, and further improved to 276.68 in March 2024. This indicates that the company's ability to meet its interest obligations has strengthened over time. A higher interest coverage ratio signifies that Nextracker Inc. is more capable of servicing its debt payments from its operating income. This trend is positive as it suggests a healthier financial position and lower financial risk for the company.