Western Digital Corporation (WDC)
Solvency ratios
| Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 2.64 | 3.03 | 2.06 | 2.13 | 2.24 | 2.35 | 2.23 | 2.37 | 2.25 | 2.17 | 2.07 | 2.12 | 2.15 | 2.14 | 2.17 | 2.32 | 2.44 | 2.55 | 2.60 | 2.65 |
The solvency profile of Western Digital Corporation, as derived from the provided data, indicates a notably conservative financial structure. Specifically, the debt-to-assets ratio, debt-to-capital ratio, and debt-to-equity ratio are reported as zero across all observed periods, signifying the absence of recorded debt in the company's financial statements during this timeframe. This consistently zero debt ratio suggests that Western Digital has maintained a debt-free capital structure throughout the periods analyzed, relying primarily on equity financing or internal funds to support its operations.
Complementing this observation, the financial leverage ratio exhibits a gradual decrease from approximately 2.65 in September 2020 to around 2.06 in December 2024. Although still above 2, this decline reflects a reduction in leverage, potentially indicating a less aggressive use of debt relative to equity over time. The ratio’s fluctuation suggests that if leverage was present, it was modest and possibly adjusted over the period.
Overall, Western Digital shows an exceptionally conservative approach to leverage, with no recorded debt ratios and a decreasing leverage ratio. This pattern emphasizes a robust equity base and suggests that the company’s operations do not depend on debt financing. Such a structure potentially enhances the firm’s solvency position, reducing financial risk and increasing resilience against adverse economic conditions.
Coverage ratios
| Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 2.68 | 4.79 | 5.07 | 2.55 | -0.59 | -2.70 | -4.85 | -5.81 | -3.87 | 0.15 | 3.45 | 6.91 | 8.75 | 8.78 | 7.70 | 5.90 | 3.63 | 2.17 | 1.84 | 1.37 |
The interest coverage ratio of Western Digital Corporation experienced notable fluctuations over the analyzed period from September 2020 to June 2025. Initially, the ratio demonstrated a progressive improvement, rising from 1.37 at September 30, 2020, to a peak of 8.78 by March 31, 2022. This upward trend indicates a strengthening capacity to meet interest obligations through earnings before interest and taxes (EBIT), reflecting a period of financial recovery and enhanced earnings generation.
However, starting from September 30, 2022, the ratio exhibited a declining trend, dropping sharply to negative territory by March 31, 2023. Specifically, the ratio decreased to 0.15 in March 2023 and turned negative in June 2023, recording -3.87, with subsequent figures remaining negative through the end of 2024 and into the first half of 2025. Negative interest coverage ratios imply that the company's EBIT was insufficient to cover interest expenses, indicating periods of significant financial stress and potential difficulties in servicing debt obligations solely from operating income.
The data also reveal a brief resurgence in interest coverage beginning in September 2024, with the ratio turning positive again at 2.55, and subsequently rising to 4.79 by March 2025. This improvement suggests some level of operational and earnings recovery, enhancing the company's ability to meet its interest obligations.
Overall, the trend indicates a period of financial distress starting around late 2022, characterized by negative interest coverage ratios and potential liquidity concerns. The observed recovery in late 2024 and early 2025 hints at a potential stabilization or improvement in profitability and cash flow generating ability. Continual positive interest coverage in upcoming periods would be necessary to confirm sustained financial stability and the company's capacity to service debt without dislocation.
See also:
Western Digital Corporation Solvency Ratios (Quarterly Data)