Workday Inc (WDAY)
Solvency ratios
| Jan 31, 2025 | Jan 31, 2024 | Jan 31, 2023 | Jan 31, 2022 | Jan 31, 2021 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.17 | 0.18 | 0.22 | 0.06 | 0.08 |
| Debt-to-capital ratio | 0.25 | 0.27 | 0.35 | 0.12 | 0.17 |
| Debt-to-equity ratio | 0.33 | 0.37 | 0.53 | 0.14 | 0.21 |
| Financial leverage ratio | 1.99 | 2.04 | 2.41 | 2.31 | 2.66 |
Workday Inc's solvency ratios provide insights into the company's ability to meet its long-term financial obligations and the extent to which it relies on debt financing.
1. Debt-to-assets ratio: This ratio indicates the proportion of the company's assets financed by debt. Workday's debt-to-assets ratio has generally decreased over the years, from 0.08 in January 2021 to 0.17 in January 2025. This trend suggests that Workday has become less reliant on debt to finance its assets.
2. Debt-to-capital ratio: The debt-to-capital ratio reflects the percentage of the company's capital structure that is financed by debt. Workday's debt-to-capital ratio also followed a decreasing trend, reducing from 0.17 in January 2021 to 0.25 in January 2025. This indicates that Workday's capital structure has become less leveraged over the years.
3. Debt-to-equity ratio: The debt-to-equity ratio measures the proportion of debt to equity in the company's capital structure. Workday's debt-to-equity ratio declined from 0.21 in January 2021 to 0.33 in January 2025. This decrease implies that Workday's reliance on debt funding relative to equity has increased slightly over the period.
4. Financial leverage ratio: The financial leverage ratio evaluates the company's total assets relative to its equity. Workday's financial leverage ratio has shown a decreasing trend, from 2.66 in January 2021 to 1.99 in January 2025. A declining financial leverage ratio suggests that the company is relying less on debt to finance its assets compared to equity.
In summary, Workday Inc's solvency ratios indicate a generally positive outlook in terms of its ability to meet long-term obligations and manage debt levels effectively. The decreasing trends in debt ratios and financial leverage ratio suggest a strengthening financial position and reduced reliance on debt financing over the years.
Coverage ratios
| Jan 31, 2025 | Jan 31, 2024 | Jan 31, 2023 | Jan 31, 2022 | Jan 31, 2021 | |
|---|---|---|---|---|---|
| Interest coverage | 3.64 | 4.12 | -1.55 | 1.97 | -3.00 |
The interest coverage ratio measures a company's ability to cover its interest expenses with its operating income. Looking at Workday Inc's interest coverage ratio over the past five years, we observe fluctuations in the company's ability to cover its interest payments.
On January 31, 2021, the interest coverage ratio stood at -3.00, indicating that the company's operating income was insufficient to cover its interest expenses, raising concerns about Workday's financial health in that period. The ratio improved significantly to 1.97 on January 31, 2022, showing that the company's operating income had gotten closer to covering its interest obligations. However, the company's interest coverage ratio dipped again to -1.55 on January 31, 2023, indicating a renewed struggle to cover interest costs.
Subsequently, Workday Inc displayed a noteworthy improvement in its ability to cover interest payments, with the interest coverage ratio increasing to 4.12 on January 31, 2024, and maintaining at a healthy level of 3.64 on January 31, 2025. This upward trend demonstrates the company's enhanced capacity to meet its interest obligations from operating income, suggesting improved financial stability during these periods.
In summary, Workday Inc's interest coverage ratio has exhibited variations over the past five years, with some periods showing challenges in covering interest expenses while others reflect significant improvements in financial performance and debt-servicing ability. Investors and stakeholders should continue monitoring this ratio to assess the company's financial health and ability to meet its debt obligations.