Science Applications International Corporation Common Stock (SAIC)

The analysis of Science Applications International Corporation Common Stock solvency ratios over the past five years reveals a generally improving trend in terms of solvency and leverage indicators.

The Debt-to-assets ratio has shown a decreasing trend from 0.42 in 2023 to 0.38 in 2024, indicating that the company has been able to reduce its dependence on debt to finance its assets, which is a positive sign of financial health.

The Debt-to-capital ratio has also followed a downward trend, decreasing from 0.58 in 2023 to 0.53 in 2024. This suggests that the company is relying less on debt to fund its operations relative to its overall capital structure.

The Debt-to-equity ratio has shown a noticeable improvement, decreasing from 1.38 in 2023 to 1.13 in 2024. This indicates that the company's debt levels relative to its equity have decreased, which generally signifies lower financial risk.

The Financial leverage ratio has decreased from 3.27 in 2023 to 2.98 in 2024. This reduction in financial leverage indicates that the company has been able to lower its reliance on debt financing, contributing to a stronger financial position.

Overall, the improving solvency ratios of Science Applications International Corporation Common Stock over the analyzed period suggest that the company has been successful in managing its debt levels, enhancing its financial stability, and reducing the risks associated with high leverage.

---

Coverage ratios

The interest coverage ratio reflects Science Applications International Corporation's ability to meet its interest obligations with its earnings before interest and taxes (EBIT). The interest coverage ratio has exhibited significant fluctuations over the past five years, ranging from a low of 3.20 in January 2021 to a high of 105.86 in February 2024.

A higher interest coverage ratio indicates that the company is more capable of servicing its debt obligations. The substantial increase in the interest coverage ratio from 3.20 in January 2021 to 105.86 in February 2024 is a positive sign, suggesting that the company's earnings have improved significantly, providing ample coverage for its interest payments.

However, it is important to note that a very high interest coverage ratio, such as the one observed in February 2024, may indicate that the company is not leveraging its capital structure efficiently. It could also imply that the company has taken on very little debt relative to its earnings, potentially missing out on opportunities for growth and increased returns for shareholders.

In contrast, the lower interest coverage ratios in the previous years, especially the notably low ratio of 3.20 in January 2021, may have indicated higher financial risk and a lower ability to cover interest expenses with operating income.

In reviewing the trend of the interest coverage ratio, it is essential to understand the underlying reasons for the fluctuations and assess the company's overall financial health and management of debt levels. Additional analysis, such as comparing the interest coverage ratio to industry peers or evaluating the company's overall capital structure, would provide further insights into Science Applications International Corporation's financial performance.