Synaptics Incorporated (SYNA)

Solvency ratios provide insights into a company's ability to meet its financial obligations over the long term, indicating the extent of financial risk. Looking at the solvency ratios of Synaptics Incorporated over the past five years, we observe the following trends:

1. Debt-to-assets ratio: This ratio reflects the proportion of a company's assets financed by debt. Synaptics' debt-to-assets ratio has fluctuated over the years, ranging from 0.06 in 2020 to 0.37 in 2023. A lower ratio implies less reliance on debt for asset financing, suggesting a stronger financial position in terms of asset coverage.

2. Debt-to-capital ratio: This ratio measures the balance of debt and equity in a company's capital structure. Synaptics' debt-to-capital ratio has varied from 0.11 in 2020 to 0.44 in 2022 and 2023. A higher ratio indicates a greater proportion of debt in the capital mix, potentially increasing financial risk and dependence on debt financing.

3. Debt-to-equity ratio: The debt-to-equity ratio indicates the extent to which a company's operations are funded by debt relative to equity. Synaptics' debt-to-equity ratio has shown fluctuations over the years, ranging from 0.12 in 2020 to 0.78 in 2023. A higher ratio signifies higher financial leverage and risk due to increased reliance on debt financing.

4. Financial leverage ratio: This ratio compares a company's total assets to its shareholders' equity, reflecting the degree of financial leverage employed by the firm. Synaptics' financial leverage ratio has shifted from 2.07 in 2020 to 2.30 in 2021, indicating changes in the company's capital structure and potential impact on risk and return for investors.

Overall, the analysis of Synaptics' solvency ratios highlights the company's varying levels of debt utilization and financial risk management over the past five years. Investors and stakeholders should closely monitor these ratios to assess the company's solvency position and make informed decisions regarding investment and risk management strategies.

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Coverage ratios

The interest coverage ratio for Synaptics Incorporated has been fluctuating over the past five years, as shown in the table. It decreased from 8.00 in 2020 to 4.76 in 2021, indicating a decline in the company's ability to cover its interest expenses with its operating income. However, the ratio improved in 2022 to 11.67, suggesting a significant increase in the company's ability to meet its interest obligations.

In 2023, the interest coverage ratio slightly decreased to 3.27, before experiencing a significant decline to -0.91 in 2024. A negative interest coverage ratio indicates that the company's operating income is not sufficient to cover its interest expenses, raising concerns about its financial health and ability to meet debt obligations.

Overall, the fluctuating trend in Synaptics Incorporated's interest coverage ratio indicates a varying ability to service its debt over the years, with recent years showing some vulnerability in meeting interest payments. It is essential for the company to closely monitor and manage its debt levels and operating performance to ensure a healthy interest coverage ratio in the future.