Paramount Skydance Corporation Class B Common Stock (PSKY)

The solvency ratios for Paramount Skydance Corporation Class B Common Stock from December 31, 2020, through December 31, 2024, indicate a consistent absence of debt relative to the company's assets and capitalization. Specifically, the debt-to-assets ratio remains at zero throughout the period, suggesting that the company has not utilized leverage through debt financing during these years. Similarly, the debt-to-capital ratio and debt-to-equity ratio also remain at zero, reinforcing the inference that the company’s capital structure is entirely equity-based without any debt obligations.

Despite the absence of debt, the financial leverage ratio exhibits variation over the period, decreasing from 3.43 in 2020 to 2.38 in 2023, before slightly increasing to 2.83 in 2024. This ratio measures the extent to which the company utilizes assets financed through debt relative to its equity and indicates that, while debt leverage is not present, other factors—such as the composition of assets and shareholders’ equity—contribute to the leverage calculation. The fluctuations suggest a change in the company's asset distribution or equity levels rather than debt levels.

Overall, the company’s capital structure appears to be entirely equity-financed, highlighting a conservative leverage profile with no reliance on debt. The variations in the financial leverage ratio suggest minor adjustments in asset or equity levels but do not reflect increased debt-related risk.

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Coverage ratios

The interest coverage ratio for Paramount Skydance Corporation Class B Common Stock exhibits significant variation over the analyzed period from December 31, 2020, to December 31, 2024. In 2020, the company demonstrated a healthy interest coverage ratio of 4.05, indicating it comfortably covered its interest expenses with its operating earnings. However, by the end of 2021, this ratio sharply declined to -9.48, transitioning from a positive to a negative figure, which suggests that the company's operating earnings were insufficient to cover interest obligations, and it likely incurred losses or had extraordinary expenses surpassing its earnings.

The subsequent year, 2022, saw a considerable improvement, with the ratio rebounding to 2.36, returning to a positive territory and reflecting a better capacity to meet interest obligations through operating income. Nonetheless, the trend continued to deteriorate in 2023, with the ratio plummeting to -0.36, indicating that operating earnings once again fell short of covering interest expenses, although the deficit was relatively small. In 2024, the metric further declined to -6.18, reinforcing a pattern of persistent difficulties in generating sufficient operating income to handle interest payments, likely signaling ongoing financial challenges or increased debt burdens.

Overall, the interest coverage ratio demonstrates a volatile financial position with periods of adequate coverage interspersed with significant deficits, raising concerns regarding the company's ability to sustainably meet its interest obligations without reliance on external factors such as debt refinancing or capital infusions.