Trimble Inc (TRMB)

Solvency ratios provide insights into a company's ability to meet its long-term financial obligations. In the case of Trimble Inc, analyzing the solvency ratios from 2019 to 2023 reveals the following trends:

1. Debt-to-assets ratio: This ratio demonstrates the proportion of a company's assets financed by debt. Trimble's debt-to-assets ratio has shown an upward trend from 0.17 in 2019 to 0.27 in 2023, indicating an increase in the utilization of debt to finance its assets.

2. Debt-to-capital ratio: The debt-to-capital ratio reflects the percentage of a company's capital structure that is financed by debt. Trimble's debt-to-capital ratio has also been increasing over the years, indicating a higher reliance on debt funding compared to equity in its capital structure.

3. Debt-to-equity ratio: The debt-to-equity ratio measures the proportion of a company's financing that comes from debt relative to equity. Trimble's debt-to-equity ratio has shown a fluctuating pattern, but overall experienced an increase from 0.30 in 2019 to 0.56 in 2023, suggesting a higher level of financial leverage over the years.

4. Financial leverage ratio: The financial leverage ratio compares a company's total assets to its equity and provides insights into the company's level of financial risk. Trimble's financial leverage ratio has shown slight fluctuations but has remained relatively stable over the years, reflecting moderate financial risk.

Overall, Trimble Inc's solvency ratios indicate a progressive increase in the company's reliance on debt financing to support its operations and investments. This trend suggests a higher level of financial leverage and potential risks associated with debt obligations, which may require close monitoring to ensure sustainable financial health and stability in the long run.

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Coverage ratios

Interest coverage ratio measures a company's ability to cover its interest expenses with its operating income. Trimble Inc's interest coverage has fluctuated over the past five years, ranging from 2.79 in 2023 to 8.58 in 2021. The declining trend in interest coverage from 2021 to 2023 indicates that the company may have faced challenges in generating sufficient operating income to cover its interest expenses. A lower interest coverage ratio suggests that Trimble Inc may have a higher risk of defaulting on its debt obligations. It is important for investors and creditors to monitor this ratio to assess the company's financial health and ability to meet its debt obligations.