ScanSource Inc (SCSC)

Solvency ratios

Jun 30, 2025 Mar 31, 2025 Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020
Debt-to-assets ratio 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Debt-to-capital ratio 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Debt-to-equity ratio 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Financial leverage ratio 1.97 1.91 1.89 1.94 1.95 1.89 1.87 2.07 2.28 2.25 2.47 2.42 2.40 2.28 2.30 2.27 2.29 2.29 2.34 2.58

The analysis of ScanSource Inc.’s solvency ratios over the specified periods reveals a notable pattern of zero values recorded for the debt-to-assets ratio, debt-to-capital ratio, and debt-to-equity ratio from September 30, 2020 through June 30, 2025. This indicates that during this timeframe, the company either maintained no recorded debt in these specified metrics or the debt levels were negligible enough to fall below the measurement threshold.

Concurrently, the financial leverage ratio demonstrates a decreasing trend over the analyzed periods. Starting at 2.58 as of September 30, 2020, it gradually declines, reaching approximately 1.97 by June 30, 2025. This downward movement suggests a reduction in the company's reliance on financial leverage relative to its assets and equity base, potentially reflecting a strategic shift toward lower indebtedness or an increase in equity financed through retained earnings or equity issuance.

In consolidating these observations, the data portrays a simplified scenario where traditional debt ratios are reported as zero, possibly indicating an absence of long-term or short-term borrowings within the measurement scope, or the ratios are calculated based on minimal or offsetting liabilities. Meanwhile, the decreasing financial leverage ratio signals an ongoing reduction in leverage intensity, which could imply a strengthening of the company's solvency position or a prudent approach to maintaining minimal reliance on debt financing.

Overall, the solvency profile suggests that ScanSource Inc. has operated with little to no debt over the observed periods, and its leverage has been systematically decreasing, potentially contributing to a more conservative financial stance. However, the lack of debt in the ratios should be interpreted with caution, considering the possibility of data reporting conventions or specific accounting treatments that may influence these metrics.


Coverage ratios

Jun 30, 2025 Mar 31, 2025 Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020
Interest coverage 9.08 12.20 11.45 10.40 7.60 6.26 5.78 5.96 7.16 8.73 11.71 15.62 19.19 19.39 16.98 14.06 10.57 -8.98 -8.95 -7.36

The interest coverage ratios of ScanSource Inc., as provided in the data, exhibit notable fluctuations over the examined period from September 2020 to June 2025. During the latter part of 2020 and early 2021, the company experienced negative interest coverage ratios, specifically -7.36 in September 2020, -8.95 in December 2020, and -8.98 in March 2021. These negative values indicate that the company's earnings before interest and taxes (EBIT) were insufficient to cover interest expenses, suggesting significant financial distress or losses during this period.

In the subsequent quarters, there was a marked improvement. Starting from June 2021, the interest coverage ratio turned positive, reaching 10.57, and further rising to 14.06 by September 2021. This upward trend continued through 2021 and into 2022, with ratios peaking at 19.39 in March 2022 and remaining relatively high, with values around 19.19 in June 2022 and 15.62 in September 2022. These high ratios imply that the company had ample earnings to comfortably cover its interest obligations during this period.

From late 2022 onward, the ratios demonstrated a downward trend, although they remained positive. Notably, the ratio declined from 11.71 in December 2022 to 8.73 in March 2023, and further to 7.16 in June 2023. This suggests a gradual weakening in the company’s ability to cover interest expenses, possibly due to decreased earnings or increased interest expenses.

In the most recent quarters (September 2023 through June 2025), the ratios stabilized within a range of approximately 5.78 to 12.20, indicating a continued but moderate capacity to cover interest payments. The lowest observed ratio in this period was 5.78 in December 2023, while the highest was projected at 12.20 in March 2025. The data reflects a recovery phase starting from late 2023, with interest coverage ratios trending upward toward 2025.

Overall, ScanSource Inc. experienced a significant improvement in its interest coverage ratios starting mid-2021, transitioning from negative to highly positive levels indicative of healthier financial footing. Subsequent years reveal a gradual decline in coverage, which, despite remaining positive, signals a reduced margin of safety concerning interest payment capacity. The recent upward trend suggests some stabilization, but the ratios do not revisit the earlier peak levels, pointing to a potentially cautious outlook regarding the company’s ability to manage interest expenses relative to its earnings.