Progress Software Corporation (PRGS)

The solvency ratios of Progress Software Corp. indicate its ability to meet its long-term obligations and the extent to which it relies on debt financing.

The debt-to-assets ratio has shown a consistent upward trend over the past five years, reaching 0.45 in Nov 30, 2023, implying that 45% of the company's assets are financed by debt. This indicates a moderate level of asset coverage by debt.

The debt-to-capital ratio has also exhibited a steady increase over the years, reaching 0.61 in Nov 30, 2023. This implies that 61% of the company's capital structure is attributable to debt. This indicates a significant reliance on debt financing to fund its operations.

The debt-to-equity ratio has exhibited a consistent upward trend as well, reaching 1.57 in Nov 30, 2023. This indicates that for every dollar of equity, the company has $1.57 in debt, signaling a relatively high level of financial leverage.

The financial leverage ratio has shown a similar increasing trend, reaching 3.49 in Nov 30, 2023. This suggests that the company's reliance on debt has substantially amplified its return on equity, but also increases the risk for equity holders.

Overall, the solvency ratios demonstrate a trend of increasing leverage and reliance on debt financing over the years, which could pose risks in terms of the company's ability to meet its long-term obligations and may require careful monitoring and management of its debt levels.

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Coverage ratios

The interest coverage ratio measures a company's ability to meet its interest payment obligations. A higher ratio indicates that the company is more capable of servicing its debt. Looking at the historical data for Progress Software Corp., we observe that the interest coverage ratio has fluctuated over the past five years.

In 2023, the interest coverage ratio stands at 4.22, indicating a decrease from the previous year. This decline may raise concerns about the company's ability to cover its interest expenses from its operating income. However, it's important to note that the 2023 ratio of 4.22 still suggests that Progress Software Corp. is generating sufficient operating income to cover its interest payments.

The 2023 figure also represents a notable decrease compared to 2020, when the interest coverage ratio was 11.53, indicating a significant decrease in its ability to cover interest expenses. Furthermore, the 2023 ratio is lower than the 5-year average, suggesting potential concerns about its ability to cover interest expenses efficiently, indicating a downward trend in the company's interest coverage.

Overall, the analysis of Progress Software Corp.'s interest coverage reveals a fluctuating trend, with a decreasing ratio in 2023 compared to both the previous year and the 5-year average, suggesting the need for a closer examination of the company's debt management and financial risk.