Paramount Skydance Corporation Class B Common Stock (PSKY)

The solvency ratios for Paramount Skydance Corporation Class B Common Stock across the observed period indicate a consistent financial position with minimal leverage. The analysis of key ratios reveals the following insights:

1. Debt-to-Assets Ratio:
This ratio remains at 0.00 throughout the entire period, signaling an absence of debt relative to assets. This suggests that the company wholly finances its assets with equity or other non-debt sources, implying a robust equity base and a conservative capital structure.

2. Debt-to-Capital Ratio:
Similarly, the debt-to-capital ratio is uniformly at 0.00, confirming that debt does not constitute part of the company's capital structure during this timeframe. The company has not relied on debt financing and maintains a capital structure entirely composed of equity or other non-debt instruments.

3. Debt-to-Equity Ratio:
This ratio also remains at 0.00 throughout, indicating no outstanding debt relative to shareholders' equity. This situation reinforces the conclusion that the company operates without leverage from debt, lowering interest obligations and financial risk.

4. Financial Leverage Ratio:
The financial leverage ratio fluctuates between approximately 2.38 and 3.53. Despite the absence of debt, this ratio rises above 1, which generally indicates the level of asset utilization or other liabilities outside of traditional debt. Notably, the ratio has fluctuated over time, with an initial high at 3.53 in September 2020, decreasing progressively to around 2.38 by December 2023, then rising again slightly towards mid-2025. This pattern suggests variable utilization of financial resources or the presence of off-balance-sheet items that influence leverage calculations. The ratios above 2 imply that, relative to shareholders’ equity, the company's assets are being financed in a manner that provides some level of financial stability, even without traditional debt.

Summary:
Overall, Paramount Skydance Corporation Class B Common Stock exhibits an exceptionally conservative capital structure characterized by zero recorded debt as reflected in the debt-to-assets, debt-to-capital, and debt-to-equity ratios. The key leverage measure, the financial leverage ratio, fluctuates within a moderate range, highlighting some variation in asset or liability management but consistent with a debt-free operation. This financial profile indicates low financial risk stemming from leverage but also suggests the company's capacity to generate adequate equity or internal resources to support its assets without reliance on external borrowing.

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Coverage ratios

The interest coverage ratio for Paramount Skydance Corporation Class B Common Stock exhibits a notable decline over the observed period, reflecting a significant deterioration in the company's ability to meet its interest obligations from its earnings.

Initially, during September 2020, the ratio stood at a healthy 3.76, indicating that the company's earnings were approximately 3.76 times its interest expenses. This level of coverage suggests a comfortable margin of safety for debt servicing. The ratio subsequently increased to 4.32 by the end of 2020 and maintained a similar upward trend into March and June 2021, reaching 4.61 and 4.64, respectively, before slightly declining to 4.08 at the end of December 2021. These figures indicate periods of relative stability and improved ability to cover interest costs in the early 2021 period.

However, starting from March 2022, the interest coverage ratio experienced a steady decline, falling to 3.41 and then to 3.17 by June 2022. The downward trend continued into the latter half of 2022, with the ratio decreasing further to 2.96 in September 2022 and to 2.70 in December 2022. This sustained decline suggests increasingly tighter margins for the company's capacity to service interest obligations solely from operating earnings.

The situation deteriorated sharply in 2023, with the ratio plunging to 0.52 in March 2023 and turning negative at -0.52 in June 2023, indicating that the company's earnings were no longer sufficient to cover interest expenses, leading to potential concerns over financial solvency. The negative trend persisted through September and December 2023, with ratios of -0.63 and -0.40, respectively, further emphasizing the strain on the company’s ability to meet interest obligations.

In 2024, the fluctuations continued, with a slight recovery in March to 0.50, but the ratio reverted to negative territory in subsequent quarters, reaching as low as -5.78 in September 2024. The negative interest coverage ratios throughout most of 2024 imply that operating earnings were significantly insufficient to cover interest expenses, reflecting severe financial distress.

Interestingly, the data from 2025 indicates a potential turnaround, with the ratio rising to 1.60 in June 2025, suggesting improved earnings capacity relative to interest costs. This suggests that after a prolonged period of negative or minimal coverage, the company's financial position might have started to recover.

Overall, the trend portrays a trajectory from healthy coverage levels in the initial periods toward a critical decline and sustained financial difficulty in recent years, with some signs of potential recovery emerging in mid-2025. The persistent negative ratios particularly highlight severe challenges in the company's ability to service its debt solely from operational earnings.