Plexus Corp (PLXS)

The solvency ratios of Plexus Corp provide insights into the company's ability to meet its long-term financial obligations and the extent to which it relies on debt financing.

The Debt-to-assets ratio has shown a decreasing trend over the five-year period, from 0.13 in 2020 to 0.06 in 2024. This indicates that the company's level of debt in relation to its total assets has been decreasing, implying a stronger financial position with lower reliance on debt.

The Debt-to-capital ratio has also shown a decreasing trend over the same period, from 0.23 in 2020 to 0.13 in 2024. This ratio reflects the proportion of the company's capital structure that is debt financing, and the declining trend suggests a favorable mix of equity and debt in the capital structure.

The Debt-to-equity ratio has exhibited fluctuations but has generally decreased from 0.31 in 2020 to 0.15 in 2024. This ratio indicates the extent to which the company's operations are funded by debt versus equity, and the decreasing trend implies a lower reliance on debt and improved equity financing over the years.

The Financial leverage ratio measures the amount of assets a company holds relative to its equity, and Plexus Corp has shown a relatively stable financial leverage ratio over the period, ranging from 2.34 in 2020 to 2.38 in 2024. This ratio suggests that the company is effectively utilizing debt to finance its assets while maintaining a solid equity base.

In summary, the solvency ratios of Plexus Corp demonstrate a positive trend towards lower debt levels and improved financial stability over the years, indicating a stronger financial position and ability to meet its long-term obligations.

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Coverage ratios

The interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt obligations. A higher interest coverage ratio indicates that a company is more capable of servicing its debt. In the case of Plexus Corp, the interest coverage ratio has varied over the past five years:

- In 2024, Plexus Corp's interest coverage ratio was 5.49, indicating that the company earned 5.49 times the amount of interest expense required to cover its interest payments. This ratio suggests that Plexus Corp had a moderate ability to cover its interest obligations.
- In 2023, the interest coverage ratio improved to 6.10, indicating a slightly stronger ability to cover interest expenses compared to the previous year.
- The interest coverage ratio significantly increased to 10.98 in 2022, signaling a substantial improvement in Plexus Corp's ability to cover interest payments.
- In 2021, the interest coverage ratio was 12.25, indicating a further enhancement in the company's capacity to service its debt.
- The interest coverage ratio decreased slightly to 9.38 in 2020, yet still reflected a reasonable ability to meet interest payments.

Overall, Plexus Corp has shown a generally healthy trend in its interest coverage ratio over the past five years, demonstrating an increasing ability to cover interest expenses. This improvement suggests that the company's financial health with regard to debt obligations has strengthened, providing some assurance to creditors and investors regarding its ability to manage debt effectively.