Western Digital Corporation (WDC)
Solvency ratios
| Jun 30, 2025 | Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 2.53 | 2.24 | 2.25 | 2.15 | 2.44 |
The solvency ratios for Western Digital Corporation over the specified period indicate a consistent financial structure characterized by the absence of leverage through debt. Specifically, the debt-to-assets, debt-to-capital, and debt-to-equity ratios are all reported as zero from June 30, 2021, through June 30, 2025. This pattern suggests that the company has maintained a debt-free capital structure during this timeframe, relying primarily on internal financing or equity for its capital needs.
The financial leverage ratio, on the other hand, exhibits variation across the observed periods, with a starting value of 2.44 on June 30, 2021, decreasing to 2.15 in 2022, and subsequently increasing slightly to 2.25 in 2023 and 2.24 in 2024, before rising to 2.53 in 2025. This ratio measures the extent to which the company is utilizing assets funded by equity relative to its total assets. The consistent reports of zero debt paired with a leverage ratio above 2.0 suggest that the ratio is derived largely from other factors, potentially reflecting operational leverage or the way assets and equity are structured on the balance sheet, rather than leverage from borrowed funds.
Overall, the data indicates that Western Digital Corporation has operated without debt during this period, resulting in a debt-free capital structure, which implies high solvency and low financial risk related to leverage. The slight fluctuations in the financial leverage ratio could be attributed to changes in asset and equity levels but do not reflect increased indebtedness or financial vulnerability.
Coverage ratios
| Jun 30, 2025 | Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | |
|---|---|---|---|---|---|
| Interest coverage | 4.40 | -0.59 | -3.94 | 8.77 | 3.40 |
The interest coverage ratio for Western Digital Corporation has exhibited considerable variability over the period from 2021 to 2025. As of June 30, 2021, the company demonstrated a healthy interest coverage ratio of 3.40, indicating that its earnings before interest and taxes (EBIT) were sufficient to cover interest obligations approximately 3.4 times, reflecting a comfortable liquidity position.
By June 30, 2022, this ratio experienced a notable improvement to 8.77, suggesting a significant enhancement in operating performance or a reduction in interest expenses, thereby markedly strengthening the firm's capacity to meet its interest commitments.
However, by June 30, 2023, the interest coverage ratio deteriorated sharply to a negative value of -3.94. This indicates that the company's EBIT had fallen below its interest expenses, likely resulting from declining earnings, increased interest charges, or both. The negative ratio implies that Western Digital was unable to generate sufficient operational income to cover interest obligations, raising concerns about its short-term financial stability.
The negative trend continued into June 30, 2024, with the ratio at -0.59. Although the loss in coverage narrowed somewhat compared to the previous year, it still reflects an inability to comfortably service interest expenses solely from operating earnings. This persistent negative coverage underscores ongoing financial challenges within that period.
By June 30, 2025, the ratio is projected to recover to 4.40, which indicates a significant turnaround. A ratio above 4 suggests that the company is expected to generate sufficient EBIT to comfortably cover its interest expenses again, pointing to an anticipated improvement in profitability or reduction in interest burden.
Overall, the analysis reveals that Western Digital's interest coverage has fluctuated markedly over this timeframe. The substantial increase in 2022 signals a period of strong earnings, while the subsequent decline into negative territory reflects operational or financial difficulties. The forecasted recovery in 2025 suggests an optimistic outlook for improved earnings going forward.