Synaptics Incorporated (SYNA)

The solvency ratios for Synaptics Incorporated from June 30, 2021, through June 30, 2025, indicate a consistent pattern of no leverage stemming from debt obligations. Specifically, the debt-to-assets ratio, debt-to-capital ratio, and debt-to-equity ratio all remain at zero across this period. This suggests that the company maintains an entirely equity-financed capital structure, with no reported long-term or short-term debt.

Additionally, the financial leverage ratio demonstrates a decreasing trend, declining from 2.30 in June 2021 to 1.85 in June 2025. Although this ratio shows some decline, it remains above 1 throughout the period, indicating that the company's equity base is leveraged to some extent, but without reliance on debt financing. The downward trend in the leverage ratio could imply either an increase in equity relative to total assets or a decrease in other liabilities.

Overall, Synaptics Incorporated exhibits a solid solvency profile characterized by zero debt levels and a stable, albeit slightly decreasing, financial leverage ratio. The absence of debt reduces financial risk, suggesting that the company is not exposed to the risks associated with debt servicing or insolvency related to borrowed funds. The company's solvency position appears to be strong, with a reliance solely on equity to finance its assets over the analyzed period.

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Coverage ratios

The interest coverage ratios of Synaptics Incorporated over the specified periods illustrate significant fluctuations in the company's ability to meet its interest obligations from earnings before interest and taxes (EBIT).

As of June 30, 2021, the interest coverage ratio stood at 5.07, indicating that the company's EBIT was over five times its interest expense, reflecting a comfortable coverage level and suggesting healthy earnings capacity relative to interest obligations at that time.

By June 30, 2022, the ratio experienced a notable improvement, increasing to 11.61. This substantial rise implies a significant enhancement in earnings relative to interest expenses, indicating an even stronger capacity to service debt during that period.

However, the scenario changed markedly by June 30, 2023, when the ratio decreased to 3.27. Although still above the generally acceptable threshold of 1.5 to 2.0 for most industries, this decline suggests a deterioration in the company's earnings ability to cover interest expenses, possibly due to decreased profitability or increased interest costs.

The trend continued into June 30, 2024, where the ratio dropped below zero to -0.91. This negative value indicates that the company's EBIT was insufficient to cover interest expenses, and in fact, the company reported an operating loss or very low earnings that could not meet interest obligations, highlighting a potential liquidity concern or financial distress.

Finally, as of June 30, 2025, the interest coverage ratio equals zero, signifying that EBIT was exactly zero and therefore unable to cover any interest expenses. This scenario underscores a critical financial position in which the company is neither generating earnings before interest and taxes nor able to service its interest obligations without additional support or restructuring.

Overall, the progression of Synaptics Incorporated’s interest coverage ratios from 2021 through 2025 indicates a substantial decline in its ability to meet interest payments solely from operating earnings. The movement from a strong coverage ratio to negative territory suggests increasing financial stress and warrants further investigation into underlying operational or financial challenges affecting the company's profitability and debt servicing capacity.