Sonos Inc (SONO)
Solvency ratios
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.02 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.06 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.06 |
| Financial leverage ratio | 2.14 | 1.93 | 2.12 | 2.00 | 2.74 |
Sonos Inc's solvency ratios indicate a strong financial position with consistently low debt levels over the past five years. The debt-to-assets, debt-to-capital, and debt-to-equity ratios have all been at 0.00% since 2020, indicating that the company has not relied on debt financing to support its assets or capital structure.
The financial leverage ratio, which measures the company's total assets relative to its equity, has shown a fluctuating trend but remains within a moderate range. It increased from 2.00 in 2021 to 2.14 in 2024, with a peak of 2.74 in 2020. This suggests that while there is some leverage in the company's capital structure, it has been relatively stable over the years.
Overall, based on these solvency ratios, Sonos Inc appears to have a healthy balance sheet with minimal debt obligations and a solid equity base to support its operations and growth initiatives.
Coverage ratios
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | -108.95 | 6.99 | 125.51 | 266.08 | -12.51 |
Interest coverage ratio measures a company's ability to cover its interest expenses with its earnings before interest and taxes (EBIT). A higher interest coverage ratio indicates that the company is more capable of meeting its interest obligations.
In the case of Sonos Inc, the interest coverage ratio has shown significant fluctuations over the past five years. In 2024, the interest coverage ratio is -108.95, indicating that the company's EBIT is insufficient to cover its interest expenses, signaling a potential financial distress situation. This sharp decline from the previous year's ratio of 6.99 is concerning.
In 2023, the interest coverage ratio was 6.99, suggesting that the company's earnings were able to cover its interest expenses nearly seven times. This was a positive sign compared to the spike in the ratio in 2022 to 125.51, indicating a strong ability to meet interest payments.
The substantial improvement in 2022 from the previous year's ratio of 266.08 reflects the company's increased profitability and efficiency in managing its interest obligations. However, there was a significant decline in 2020 when the interest coverage ratio was -12.51, indicating a potential inability to meet interest payments with earnings.
Overall, the trend seen in Sonos Inc's interest coverage ratio highlights the need to closely monitor the company's financial performance and leverage levels to ensure sustainable financial health and stability.