SolarWinds Corp (SWI)

Solvency ratios

	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	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019
Debt-to-assets ratio	0.39	0.37	0.37	0.37	0.37	0.37	0.37	0.45	0.46	0.39	0.39	0.39	0.34	0.34	0.33	0.35	0.35	0.36	0.36	0.37
Debt-to-capital ratio	0.48	0.48	0.45	0.46	0.46	0.46	0.47	0.55	0.54	0.45	0.45	0.45	0.39	0.39	0.38	0.40	0.41	0.42	0.42	0.42
Debt-to-equity ratio	0.92	0.93	0.83	0.85	0.85	0.86	0.87	1.20	1.15	0.82	0.82	0.81	0.63	0.64	0.63	0.68	0.70	0.72	0.71	0.73
Financial leverage ratio	2.34	2.52	2.25	2.28	2.27	2.30	2.34	2.67	2.52	2.09	2.09	2.08	1.88	1.90	1.90	1.96	1.99	2.01	2.00	1.99

The solvency ratios of SolarWinds Corp provide insights into the company's ability to meet its long-term debt obligations.

1. Debt-to-assets ratio: This ratio remained relatively stable around 0.37 to 0.39 over the period, indicating that roughly 37% to 39% of the company's total assets were financed by debt. This suggests that the company is not overly reliant on debt to fund its assets.

2. Debt-to-capital ratio: Similarly, the debt-to-capital ratio was consistent, hovering around 0.45 to 0.48. This indicates that debt constitutes around 45% to 48% of the company's total capital, including debt and equity. The stability of this ratio reflects a balanced capital structure.

3. Debt-to-equity ratio: The debt-to-equity ratio fluctuated between 0.81 and 0.93 during the period. While the ratio exceeded 1.0 in some quarters, indicating that the company had more debt than equity, it generally remained at manageable levels. The downward trend seen at the end of the period may suggest a decreasing reliance on debt financing.

4. Financial leverage ratio: SolarWinds' financial leverage ratio ranged from 1.88 to 2.67, indicating the company's level of financial risk. The higher the ratio, the greater the company's reliance on debt financing. SolarWinds' ratio fluctuated but generally stayed within a reasonable range, suggesting that the company has been managing its debt levels effectively.

Overall, based on the solvency ratios observed, SolarWinds Corp appears to have maintained a reasonable balance between debt and equity financing, with manageable levels of leverage to support its operations and growth.

Coverage ratios

	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	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019
Interest coverage	16.64	15.08	14.03	13.10	-16.80	-84.02	-90.50	-94.25	-65.56	-1.13	-3.61	-2.26	0.46	5.13	9.32	7.52	8.96	8.42	8.65	13.97

The interest coverage ratio measures a company's ability to meet its interest obligations on outstanding debt. A higher interest coverage ratio indicates that a company is more capable of servicing its debt. Looking at the data for SolarWinds Corp over the past several quarters, we can see fluctuations in the interest coverage ratio.

In the most recent quarter ending June 30, 2024, SolarWinds Corp had an interest coverage ratio of 16.64. This indicates that the company's operating income was sufficient to cover its interest expenses approximately 16.64 times over. This is a positive sign of financial health and indicates a strong ability to meet its interest obligations.

However, previous quarters show varying levels of interest coverage ratio, with some periods showing negative ratios (such as -16.80 in the quarter ending June 30, 2023) and very low ratios, which may raise concerns about the company's ability to comfortably cover its interest expenses with its operating income.

Overall, it is important for SolarWinds Corp to maintain a consistently high interest coverage ratio to demonstrate financial stability and ensure it can meet its debt obligations without facing financial strain. Trend analysis and further investigation into the factors influencing the fluctuations in the interest coverage ratio may provide deeper insights into the company's financial performance and risk management.