Paychex Inc (PAYX)
Solvency ratios
| May 31, 2024 | Feb 29, 2024 | Nov 30, 2023 | Aug 31, 2023 | May 31, 2023 | Feb 28, 2023 | Nov 30, 2022 | Aug 31, 2022 | May 31, 2022 | Feb 28, 2022 | Nov 30, 2021 | Aug 31, 2021 | May 31, 2021 | Feb 28, 2021 | Nov 30, 2020 | Aug 31, 2020 | May 31, 2020 | Feb 29, 2020 | Nov 30, 2019 | Aug 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.08 | 0.06 | 0.07 | 0.07 | 0.08 | 0.08 | 0.09 | 0.09 | 0.08 | 0.08 | 0.08 | 0.09 | 0.09 | 0.08 | 0.09 | 0.10 | 0.09 | 0.08 | 0.09 | 0.09 |
| Debt-to-capital ratio | 0.17 | 0.18 | 0.18 | 0.18 | 0.19 | 0.19 | 0.20 | 0.20 | 0.21 | 0.20 | 0.20 | 0.21 | 0.21 | 0.21 | 0.22 | 0.22 | 0.22 | 0.22 | 0.24 | 0.24 |
| Debt-to-equity ratio | 0.21 | 0.21 | 0.23 | 0.22 | 0.23 | 0.23 | 0.25 | 0.25 | 0.26 | 0.24 | 0.26 | 0.26 | 0.27 | 0.27 | 0.28 | 0.29 | 0.29 | 0.29 | 0.31 | 0.32 |
| Financial leverage ratio | 2.73 | 3.48 | 3.42 | 3.40 | 3.02 | 3.12 | 2.87 | 2.91 | 3.12 | 3.13 | 3.11 | 3.08 | 3.13 | 3.25 | 2.98 | 3.01 | 3.07 | 3.43 | 3.39 | 3.43 |
Paychex Inc's solvency ratios provide insight into its ability to meet its long-term financial obligations. The debt-to-assets ratio, which measures the proportion of assets financed by debt, has remained relatively stable around 0.08 to 0.09 over the past few periods, indicating a conservative approach to leverage.
The debt-to-capital ratio, reflecting the extent of debt financing in the capital structure, has also remained relatively stable between 0.17 and 0.24. This ratio shows that a significant portion of Paychex Inc's capital structure is debt-funded, but it has not shown significant fluctuations over the periods analyzed.
The debt-to-equity ratio, which shows the relationship between debt and shareholders' equity, has ranged from 0.21 to 0.32. This indicates that the company has been increasing its reliance on debt financing relative to equity, which could potentially lead to higher financial risk.
The financial leverage ratio, measuring the company's ability to meet its financial obligations, has fluctuated notably between 2.73 and 3.48. A higher financial leverage ratio suggests higher financial risk as the company has a higher proportion of debt in its capital structure.
Overall, Paychex Inc's solvency ratios demonstrate a relatively stable debt position in relation to its assets and capital structure, with a gradual increase in debt relative to equity over the periods analyzed. However, the fluctuation in the financial leverage ratio indicates some variability in the company's ability to meet its long-term obligations.
Coverage ratios
| May 31, 2024 | Feb 29, 2024 | Nov 30, 2023 | Aug 31, 2023 | May 31, 2023 | Feb 28, 2023 | Nov 30, 2022 | Aug 31, 2022 | May 31, 2022 | Feb 28, 2022 | Nov 30, 2021 | Aug 31, 2021 | May 31, 2021 | Feb 28, 2021 | Nov 30, 2020 | Aug 31, 2020 | May 31, 2020 | Feb 29, 2020 | Nov 30, 2019 | Aug 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 58.29 | 57.68 | 58.06 | 56.05 | 55.40 | 54.23 | 52.88 | 51.85 | 50.27 | 49.31 | 46.99 | 44.99 | 40.80 | 39.18 | 38.68 | 37.21 | 37.64 | 37.93 | 39.52 | 51.86 |
The interest coverage ratio for Paychex Inc has exhibited a relatively stable and strong performance over the past several quarters. The ratio has consistently remained above 30, indicating that the company has more than enough operating income to cover its interest expenses.
In particular, from August 2019 to May 2023, the interest coverage ratio has been trending upwards, showing an improvement in the company's ability to meet interest obligations. The ratio peaked at 58.29 in May 2024, reflecting a robust financial position and a healthy cash flow generation capacity.
Overall, Paychex Inc's interest coverage ratio suggests that the company has a solid financial standing and is well-equipped to manage its debt obligations without facing significant financial distress.