Xerox Corp (XRX)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| 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 | 3.94 | 3.45 | 2.98 | 2.64 | 2.69 |
Analyzing Xerox Holdings Corp's solvency ratios over the past five years reveals a generally stable financial position in terms of leverage and debt management.
The debt-to-assets ratio has shown a slight increasing trend from 0.29 in 2019 to 0.33 in 2023, indicating that Xerox's level of debt in relation to total assets has been gradually rising over time. However, the company still maintains a healthy ratio below 0.50, suggesting that a significant portion of its assets are financed by equity rather than debt.
The debt-to-capital ratio has also increased steadily from 0.43 in 2019 to 0.54 in 2023, reflecting a rise in the proportion of debt in the company's overall capital structure. This may indicate an increased reliance on debt financing, which could potentially raise concerns about Xerox's ability to meet its debt obligations in the long term.
The debt-to-equity ratio has shown a consistent upward trend, reaching 1.19 in 2023. This indicates that Xerox has been funding a larger portion of its assets through debt compared to equity, which could imply higher financial risk and a potential strain on the company's equity cushion in the event of financial distress.
The financial leverage ratio has also been on the rise, increasing from 2.59 in 2019 to 3.64 in 2023. This indicates that Xerox's level of financial leverage has been growing over the years, which may suggest that the company is relying more heavily on debt to finance its operations and investments.
Overall, while Xerox Holdings Corp's solvency ratios have shown some deteriorating trends, with increasing levels of debt relative to both assets and equity, the company's ratios still remain within reasonable limits for now. However, stakeholders should continue to monitor these ratios closely to ensure that Xerox maintains a sustainable capital structure and does not become overly leveraged in the future.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 0.86 | -0.63 | -1.28 | 2.19 | 7.49 |
The interest coverage ratio measures a company's ability to meet its interest obligations with its operating income. A higher interest coverage ratio indicates a stronger ability to meet interest payments. Looking at the data for Xerox Holdings Corp over the past five years, we observe fluctuations in the interest coverage ratio. In 2019, the ratio was notably high at 12.98, indicating a robust ability to cover interest expenses. However, there was a significant decline in 2020 to 5.15, which may raise concerns about the company's ability to service its debt with operating income.
The subsequent years show some improvement in the interest coverage ratio, with values of 3.51 in 2021, 2.69 in 2022, and 6.65 in 2023. Although the ratio has been increasing, it is still relatively lower than the 2019 level. This suggests that while Xerox Holdings Corp's ability to meet interest payments has improved, it may still be operating with a moderate level of financial risk in terms of covering its interest expenses.
Overall, the trend in Xerox Holdings Corp's interest coverage ratio highlights the importance of monitoring the company's ability to generate sufficient operating income to meet its interest obligations and manage its debt effectively.