Plexus Corp (PLXS)

The solvency ratios of Plexus Corp. indicate the company's ability to meet its long-term financial obligations and serve as a measure of financial risk.

The debt-to-assets ratio has remained relatively stable over the last five years, ranging from 0.10 to 0.15, and currently stands at 0.13 as of September 30, 2023. This indicates that 13% of the company's total assets are financed by debt, with the remaining 87% financed by equity. The consistent and relatively low debt-to-assets ratio suggests that Plexus Corp. has been effectively managing its debt level in relation to its asset base.

The debt-to-capital ratio, measuring the proportion of the company's financing that comes from debt, has also shown consistency, albeit at slightly higher levels, ranging from 0.20 to 0.30. As of September 30, 2023, the ratio stands at 0.26, indicating that 26% of the company's capital is sourced from debt while the remaining 74% is from equity.

The debt-to-equity ratio, which compares the debt financing to the equity financing, has exhibited a similar pattern, with values ranging from 0.25 to 0.42. As of September 30, 2023, the ratio stands at 0.35, implying that for every dollar of equity, Plexus Corp. has 35 cents in debt. This ratio has decreased since 2022, indicating a reduction in the level of debt relative to equity.

The financial leverage ratio, measuring the extent to which the company utilizes debt to finance its assets, has also exhibited consistency over the past five years, with values ranging from 2.31 to 3.10. As of September 30, 2023, the ratio stands at 2.73, indicating that the company's assets are financed at a leverage of 2.73 times the equity. This suggests that the company has maintained a moderate level of financial leverage.

Overall, the solvency ratios of Plexus Corp. reflect a prudent approach to managing its long-term financial obligations, with a consistent and moderate level of debt financing in relation to its assets and equity.

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Coverage ratios

The interest coverage ratio for Plexus Corp. has exhibited a declining trend over the past five years. In Sep 30, 2023, the interest coverage stood at 7.71, indicating a decrease from 12.38 in Oct 1, 2022, and a significant drop from 13.94 in Oct 2, 2021. This downward trend suggests that the company's ability to meet its interest payment obligations from its operating income has weakened over the years. Although the ratio remained above 1, indicating that the company's operating income was still sufficient to cover its interest expenses, the declining trend warrants attention and may indicate deteriorating financial stability. It would be important for stakeholders to closely monitor Plexus Corp.'s future interest coverage to ensure it remains sustainable.