Teradata Corp (TDC)

The solvency ratios of Teradata Corp indicate the company's ability to meet its long-term financial obligations and the level of financial risk associated with its capital structure.

The Debt-to-assets ratio has been gradually increasing over the past five years, from 0.25 in 2021 to 0.34 in 2023. This suggests that a higher proportion of Teradata's assets are financed through debt, which may indicate a higher level of financial risk.

The Debt-to-capital ratio also shows an increasing trend, from 0.54 in 2021 to 0.82 in 2023. This indicates that a larger portion of Teradata's capital structure is funded by debt rather than equity. A higher debt-to-capital ratio could imply greater financial risk and potentially limit the company's financial flexibility.

The Debt-to-equity ratio has fluctuated over the years, reaching a high of 4.65 in 2023. This indicates that Teradata has a higher level of debt relative to its equity, which could be a concern for investors and creditors as it may signal a higher financial risk and leverage position.

Lastly, the Financial leverage ratio has shown an increasing trend, indicating a higher level of financial leverage for Teradata over the years. This implies that a significant portion of the company's assets are funded through debt, which could amplify returns but also increase financial risk.

In summary, the increasing trends in the Debt-to-assets, Debt-to-capital, Debt-to-equity, and Financial leverage ratios for Teradata Corp suggest a heightened level of financial risk and potential limitations in its financial flexibility. It would be crucial for the company to closely monitor and manage its debt levels to maintain a sustainable financial position.

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Coverage ratios

The interest coverage ratio measures a company's ability to cover its interest expenses with its operating profits. A higher ratio implies a better ability to meet interest obligations.

Analyzing Teradata Corp's interest coverage ratio over the past five years, we observe a significant improvement in financial health. The interest coverage has substantially increased from 0.70 in 2020 to 37.20 in 2023, indicating that the company is more capable of covering its interest expenses with operating profits.

The notable improvement in the interest coverage ratio suggests that Teradata Corp has enhanced its profitability and financial stability over the years. This positive trend may indicate effective cost management, increased operational efficiency, or improved revenue generation.

Overall, the consistent growth in Teradata Corp's interest coverage ratio reflects a stronger financial position and improved ability to meet its interest obligations, which can enhance investor confidence and support sustainable business growth.