Patterson Companies Inc (PDCO)
Solvency ratios
| Apr 30, 2024 | Apr 27, 2024 | Apr 30, 2023 | Apr 29, 2023 | Apr 30, 2022 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.11 | 0.00 | 0.16 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.25 | 0.00 | 0.29 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.33 | 0.00 | 0.40 | 0.00 |
| Financial leverage ratio | 2.89 | 2.89 | 2.57 | 2.58 | 2.63 |
Patterson Companies Inc's solvency ratios indicate the company's ability to meet its long-term financial obligations.
The Debt-to-assets ratio decreased from 16% in April 2023 to 11% in April 2024, showing a lower reliance on debt to finance assets. The decrease suggests a stronger ability to cover debt obligations with assets.
The Debt-to-capital ratio decreased from 29% in April 2023 to 25% in April 2024. This indicates a lower proportion of debt in the company's capital structure, which may reduce financial risk.
The Debt-to-equity ratio decreased from 40% in April 2023 to 33% in April 2024, reflecting a lower level of debt relative to shareholders' equity. A lower ratio signifies less reliance on borrowed funds for financing.
The Financial leverage ratio remained stable at 2.89 from April 27, 2024, which indicates the company's assets are financed by equity and debt in a consistent manner.
Overall, the trend of decreasing debt ratios and consistent financial leverage ratio suggests improved solvency and financial stability for Patterson Companies Inc.
Coverage ratios
| Apr 30, 2024 | Apr 27, 2024 | Apr 30, 2023 | Apr 29, 2023 | Apr 30, 2022 | |
|---|---|---|---|---|---|
| Interest coverage | 6.38 | 6.42 | 8.99 | 9.06 | 14.06 |
Interest coverage ratio is a financial metric used to assess a company's ability to meet its interest payments on 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 Patterson Companies Inc over the past few years, we observe a declining trend. In April 2022, the interest coverage ratio was 14.06, indicating that the company generated earnings more than fourteen times its interest payments. However, this ratio decreased to 9.06 in April 2023, and further dropped to 8.99 by April 2023. By April 2024, the interest coverage ratio fell to 6.42 and then slightly decreased to 6.38 in the same period.
A declining interest coverage ratio can signal potential financial risk for a company, as it implies that the company's ability to service its debt is weakening. It could indicate that Patterson Companies Inc may be relying more on debt financing, facing declining profitability, or experiencing increasing interest expenses relative to its earnings.
It is essential for investors and stakeholders to closely monitor Patterson Companies Inc's interest coverage ratio and assess the factors contributing to its trend to evaluate the company's financial health and risk of default.