SolarWinds Corp (SWI)
Solvency ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.38 | 0.37 | 0.37 | 0.39 | 0.33 |
| Debt-to-capital ratio | 0.46 | 0.45 | 0.47 | 0.45 | 0.38 |
| Debt-to-equity ratio | 0.85 | 0.83 | 0.87 | 0.82 | 0.63 |
| Financial leverage ratio | 2.26 | 2.25 | 2.34 | 2.09 | 1.90 |
Based on the provided data for SolarWinds Corp, the solvency ratios show the following trends over the five-year period:
1. Debt-to-assets ratio has slightly increased from 0.33 in 2020 to 0.38 in 2024, indicating that the company's level of debt relative to its total assets has been gradually rising.
2. Debt-to-capital ratio has also experienced a slight upward trend, from 0.38 in 2020 to 0.46 in 2024, suggesting an increasing reliance on debt to finance the business operations.
3. Debt-to-equity ratio shows a consistent increase from 0.63 in 2020 to 0.85 in 2024, indicating a higher proportion of debt compared to equity in the company's capital structure.
4. Financial leverage ratio has shown fluctuations over the period, reaching a peak of 2.34 in 2022 before slightly decreasing to 2.26 in 2024. This ratio indicates the degree to which the company is using debt to finance its assets.
Overall, the trend in these solvency ratios suggests that SolarWinds Corp has been gradually taking on more debt relative to its assets, capital, and equity, which may increase its financial risk and impact its ability to meet its debt obligations in the future. Further monitoring of these ratios is recommended to assess the company's financial health and risk management strategies.
Coverage ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 24.22 | 14.03 | -90.50 | -3.61 | 5.68 |
The interest coverage ratio for SolarWinds Corp fluctuated significantly over the past five years. In December 2020, the company had an interest coverage ratio of 5.68, indicating that it was able to cover its interest expenses nearly six times over with its operating income. However, in December 2021, the interest coverage ratio declined to -3.61, signifying that the company's operating income was insufficient to cover its interest expenses, posing a potential financial risk.
The situation worsened in December 2022 with an interest coverage ratio of -90.50, indicating a severe inability to cover interest expenses with operating income, raising concerns about the company's financial health and its ability to meet debt obligations.
However, there was a positive turnaround in December 2023, with an interest coverage ratio of 14.03, suggesting that the company's operating income had improved significantly enough to cover its interest expenses comfortably. This improvement continued in December 2024, with an interest coverage ratio of 24.22, indicating a further strengthening of SolarWinds Corp's ability to cover its interest obligations.
The fluctuation in the interest coverage ratio for SolarWinds Corp highlights the company's varying financial performance and ability to manage its debt and interest payments. Investors and stakeholders should closely monitor these ratios to assess the company's financial stability and risk profile.