Paychex Inc (PAYX)
Solvency ratios
| May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 4.01 | 2.73 | 3.02 | 3.12 | 3.13 |
The provided data on Paychex Inc’s solvency ratios indicates a consistent absence of leverage stemming from debt financing over the reported periods, as evidenced by the debt-to-assets, debt-to-capital, and debt-to-equity ratios, all of which are zero from May 31, 2021, through May 31, 2025. This suggests that the company operates without any significant long-term or short-term debt, relying primarily on equity or internal funds to finance its assets and operations. Such a debt-free capital structure minimizes financial risk associated with leverage and interest obligations, contributing to a conservative financial stance.
The financial leverage ratio exhibits a different pattern, showing variability over time. It starts at 3.13 in 2021, slightly declines to 3.12 in 2022, decreases further to 3.02 in 2023, then drops to 2.73 in 2024, before rising markedly to 4.01 in 2025. Given the absence of debt, this ratio likely reflects the ratio of total assets to equity (or other relevant leverage measures that do not include debt). The fluctuations suggest variations in the company’s asset base relative to shareholder equity, potentially due to retained earnings, share repurchases, or asset re-evaluations rather than debt's influence.
In summary, Paychex Inc’s solvency ratios indicate a debt-free or nearly debt-free capital structure over the analyzed period, emphasizing financial stability and lower leverage-related risks. The observed changes in the financial leverage ratio are attributable to internal capital management strategies and asset base adjustments rather than leverage through debt financing.
Coverage ratios
| May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | |
|---|---|---|---|---|---|
| Interest coverage | 0.00 | 60.46 | 55.40 | 50.27 | 40.80 |
The interest coverage ratio for Paychex Inc. demonstrates a consistent upward trend from May 31, 2021, through May 31, 2024. Specifically, the ratio increased from 40.80 in 2021 to 50.27 in 2022, and further to 55.40 in 2023, indicating an improved ability to cover interest expenses with operating earnings over this period. The ratio continued this upward trajectory, reaching 60.46 in 2024, which reflects a strengthening in the company's capacity to meet its interest obligations through its earnings before interest and taxes (EBIT). However, for the projected data on May 31, 2025, the ratio is recorded as 0.00, suggesting that the available data either indicates a very low or potentially negligible earnings relative to interest expenses, or that no interest coverage data is available or projected for that year. Overall, the historical trend highlights substantial financial stability regarding interest payments, with the ratio remaining comfortably high across the reporting periods up to 2024.