Simulations Plus Inc (SLP)
Solvency ratios
| Aug 31, 2024 | Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | Aug 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 1.08 | 1.09 | 1.06 | 1.09 | 1.08 |
Simulations Plus Inc has consistently maintained a low level of debt relative to its assets, capital, and equity, with a debt-to-assets, debt-to-capital, and debt-to-equity ratio of 0.00 for each year from 2020 to 2024. This indicates that the company relies less on debt financing to fund its operations and growth.
In terms of financial leverage, the company's financial leverage ratio has ranged from 1.06 to 1.09 over the same period. The slight fluctuations in the financial leverage ratio suggest that the company's use of financial leverage to support its operations and investments has been relatively stable.
Overall, the solvency ratios for Simulations Plus Inc indicate a conservative capital structure with minimal reliance on debt, which can be viewed positively as it reduces the company's financial risk and enhances its ability to weather economic downturns or unexpected challenges.
Coverage ratios
| Aug 31, 2024 | Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | Aug 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | — | — | 8.89 | 504.86 | — |
Based on the provided data for Simulations Plus Inc, the interest coverage ratio for the fiscal years ending on August 31, 2022 and August 31, 2021 were 8.89 and 504.86, respectively.
The interest coverage ratio represents the company's ability to cover its interest expenses with its earnings before interest and taxes (EBIT). A higher ratio indicates that the company is more capable of meeting its interest obligations from its operating income.
The significant increase in the interest coverage ratio from 8.89 in FY 2022 to 504.86 in FY 2021 is a positive indicator. This substantial improvement suggests a strong ability to cover interest expenses multiple times over with operating income, signaling financial stability and efficiency in managing debt obligations.
However, since there are no values available for other years, it is difficult to draw a complete trend analysis. It would be important to assess the causes behind the significant increase in interest coverage from FY 2022 to FY 2021 to understand if it was due to operational improvements, changes in capital structure, or other factors impacting the company's financial performance.