Photronics Inc (PLAB)

The solvency ratios of Photronics Inc, as depicted in the table, provide insights into the company's financial leverage and its ability to meet its long-term financial obligations.

1. Debt-to-assets ratio: This ratio measures the proportion of a company's assets that are financed by debt. A lower ratio indicates a lower reliance on debt for asset financing. Photronics Inc has maintained a consistently low debt-to-assets ratio of 0.00 over the past five years, indicating that the company relies more on equity financing to support its assets.

2. Debt-to-capital ratio: The debt-to-capital ratio assesses the extent to which a company's capital structure is composed of debt. Similar to the debt-to-assets ratio, Photronics Inc has consistently maintained a low debt-to-capital ratio of 0.00 over the period analyzed, suggesting that the company has minimal debt in relation to its total capital.

3. Debt-to-equity ratio: This ratio compares a company's total debt to its total equity, providing an indication of the company's financial leverage. Photronics Inc has also exhibited a stable debt-to-equity ratio of 0.00 over the past five years, affirming the company's conservative debt management approach and strong equity base.

4. Financial leverage ratio: The financial leverage ratio shows how much a company's assets are financed through debt. Photronics Inc's financial leverage ratio has shown slight fluctuations over the years but has generally been within a narrow range, with the latest value at 1.53. This indicates that the company utilizes a moderate level of debt to support its operations and investments.

Overall, the solvency ratios of Photronics Inc demonstrate a prudent approach to debt management and a solid financial position, with a low reliance on debt to fund its operations and investments.

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Coverage ratios

The interest coverage ratio measures a company's ability to meet its interest obligations using its operating income. A higher interest coverage ratio indicates a greater capacity to cover interest expenses. Based on the data provided for Photronics Inc over the past five years:

1. In 2020, the interest coverage ratio was very high at 639.28, suggesting the company had a strong ability to cover its interest payments with its operating income.

2. In 2021, the interest coverage ratio decreased significantly to 155.01, indicating a decline in the company's ability to cover interest expenses compared to the previous year.

3. In 2022, the interest coverage ratio improved to 405.87, showing a recovery in the company's ability to meet its interest obligations.

4. In 2023, the interest coverage ratio further increased to 594.01, indicating a continued strengthening of the company's ability to cover interest expenses.

5. The data for 2024 is not available, so the trend beyond 2023 cannot be determined.

Overall, the trend over the period analyzed shows fluctuations in the company's interest coverage ratio, with some years exhibiting significant improvements while others showing declines. Analysts should continue to monitor the company's interest coverage ratio to assess its financial health and ability to meet its debt obligations in the future.