Paylocity Holdng (PCTY)
Solvency ratios
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | |
|---|---|---|---|---|---|
| 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 | 4.11 | 4.38 | 7.84 | 5.06 | 5.05 |
Paylocity Holding's solvency ratios indicate a strong financial position with consistently low debt levels relative to assets, capital, and equity over the past five years. The debt-to-assets, debt-to-capital, and debt-to-equity ratios have all been at 0.00, suggesting that the company operates with minimal debt compared to its total assets, capital, and equity.
However, the financial leverage ratio has shown some variability over the years, with values of 4.11 in 2024, 4.38 in 2023, 7.84 in 2022, 5.06 in 2021, and 5.05 in 2020. While the current financial leverage ratio of 4.11 indicates a moderate level of financial leverage, the ratios in the earlier years were significantly higher, which might raise some concerns about the company's ability to meet its financial obligations.
Overall, the consistently low debt ratios suggest that Paylocity Holding has a sound solvency position, but monitoring the financial leverage ratio in relation to industry benchmarks and trends is important for assessing the company's long-term stability and risk management.
Coverage ratios
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | — | 542.05 | 457.26 | 339.43 | 429.68 |
Interest coverage ratio is a financial metric used to evaluate a company's ability to pay interest expenses on its outstanding debt. It is calculated by dividing a company's earnings before interest and taxes (EBIT) by its interest expenses.
Analyzing the interest coverage ratio of Paylocity Holdings over the past five years reveals a fluctuating trend. In 2020, the interest coverage ratio was 429.68, which increased significantly to 339.43 in 2021, indicating the company's improved ability to cover its interest obligations. However, there was a drastic improvement in the interest coverage in 2022, as the ratio stood at 457.26.
The most recent data shows that the company reported an interest coverage ratio of 542.05 for June 30, 2023, which signifies that Paylocity Holdings has substantially strengthened its capacity to service its interest payments. This increased ratio suggests that the company's earnings have been consistently sufficient to cover its interest expenses, reflecting favorable financial health.
Overall, the analysis of Paylocity Holdings' interest coverage ratio indicates a positive trend with an improving ability to meet its interest obligations over the years. This demonstrates the company's sound financial management and profitability, as a higher interest coverage ratio implies lower financial risk and greater stability in meeting debt obligations.