Western Digital Corporation (WDC)
Solvency ratios
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.23 | 0.24 | 0.27 | 0.32 | 0.36 |
| Debt-to-capital ratio | 0.34 | 0.35 | 0.36 | 0.44 | 0.49 |
| Debt-to-equity ratio | 0.53 | 0.53 | 0.57 | 0.79 | 0.97 |
| Financial leverage ratio | 2.24 | 2.24 | 2.15 | 2.44 | 2.69 |
The solvency ratios of Western Digital Corporation have exhibited a favorable trend over the past five years. The debt-to-assets ratio has decreased from 0.36 in 2020 to 0.23 in 2024, indicating that the company's level of debt in comparison to its total assets has decreased significantly, implying a healthier financial position.
Similarly, the debt-to-capital ratio has also shown a downward trend from 0.49 in 2020 to 0.34 in 2024. This signifies that the company is relying less on debt to fund its operations and investments, which is a positive indicator of financial stability.
The debt-to-equity ratio has also improved from 0.97 in 2020 to 0.53 in 2024, indicating that the company's reliance on debt in relation to shareholder equity has decreased. This reduction suggests a stronger financial structure and lower financial risk for the company.
Furthermore, the financial leverage ratio has shown a declining trend from 2.69 in 2020 to 2.24 in 2024, indicating that the company's use of debt to finance its assets has decreased over the years, leading to a more balanced capital structure.
Overall, Western Digital Corporation's solvency ratios reflect an improvement in its financial health and debt management practices, signaling a stronger ability to meet its financial obligations and instilling confidence in its ability to weather potential economic challenges.
Coverage ratios
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | -0.76 | -4.00 | 7.98 | 3.84 | 0.89 |
Western Digital Corporation's interest coverage ratio has fluctuated over the past five years. In 2024, the interest coverage was negative at -0.76, indicating that the company's earnings were insufficient to cover its interest expenses. This negative ratio raises concerns about the company's ability to meet its debt obligations.
In 2023, the interest coverage ratio improved to -4.00 but remained negative, suggesting ongoing challenges in generating enough operating income to cover interest expenses.
The trend reversed in 2022 with a significant improvement in the interest coverage ratio to 7.98, reflecting a positive indicator of the company's ability to meet its interest payments comfortably.
In 2021, the interest coverage ratio slightly decreased to 3.84, indicating a slight decline in the company's ability to cover its interest expenses with operating income.
In 2020, the interest coverage was at 0.89, indicating that the company's earnings were barely sufficient to cover its interest payments, highlighting potential financial strain.
Overall, Western Digital's interest coverage ratio has shown significant fluctuations, with both positive and concerning trends. Investors and stakeholders should closely monitor future financial performance to assess the company's ability to manage its debt obligations effectively.