Semtech Corporation (SMTC)

The solvency ratios of Semtech Corporation provide insights into the company's ability to meet its long-term financial obligations.

1. Debt-to-assets ratio: This ratio measures the proportion of the company's assets financed by debt. A lower ratio indicates a lower level of financial risk. Over the years, Semtech's debt-to-assets ratio fluctuated. It was 0.50 in January 29, 2023, increased to 1.00 in January 28, 2024, and then decreased to 0.00 in subsequent periods.

2. Debt-to-capital ratio: This ratio indicates the proportion of the company's capital structure that is financed by debt. A lower ratio suggests a lower dependency on debt financing. Semtech's debt-to-capital ratio was 0.63 in January 29, 2023, increased to 1.29 in January 28, 2024, and then dropped to 0.00 in the following periods.

3. Debt-to-equity ratio: This ratio reflects the extent to which a company is financed by debt relative to equity. A higher ratio may indicate higher financial risk. Semtech's debt-to-equity ratio was 1.72 in January 29, 2023, and then became unavailable for the subsequent periods.

4. Financial leverage ratio: This ratio measures the company's ability to meet its financial commitments through debt financing. A lower ratio indicates lower financial risk. Semtech's financial leverage ratio was consistent at 3.40 in January 29, 2023, and then no data is available for the following periods.

Overall, Semtech Corporation's solvency ratios showed fluctuations in the levels of debt financing relative to assets and capital, indicating a shifting pattern in the company's long-term financial stability.

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Coverage ratios

The interest coverage ratio for Semtech Corporation fluctuated over the period analyzed. It was 5.46 times on January 29, 2023, indicating that the company generated enough operating income to cover its interest expenses approximately 5.46 times. However, the ratio declined to 5.32 times on January 31, 2023.

In the subsequent period, there was a significant negative swing in the interest coverage ratio with values of -9.87 on January 28, 2024, and -8.83 on January 31, 2024. These negative values suggest that Semtech Corporation's operating income was insufficient to cover its interest expenses during these periods.

The ratio slightly improved to 0.87 on January 31, 2025, but still indicates that the company's ability to cover its interest obligations with operating income remains a concern. This analysis suggests that Semtech Corporation faced challenges in generating enough income to comfortably cover its interest payments, and investors and lenders may view this as a potential risk factor.