Analysis of Solvency Ratios
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
Western Digital Corp., solvency ratios
Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-07-01), 10-K (reporting date: 2021-07-02), 10-K (reporting date: 2020-07-03), 10-K (reporting date: 2019-06-28), 10-K (reporting date: 2018-06-29).
| Solvency ratio | Description | The company |
|---|---|---|
| Debt to equity ratio | A solvency ratio calculated as total debt divided by total shareholders’ equity. | Western Digital Corp. debt to equity ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023. |
| Debt to equity ratio (including operating lease liability) | A solvency ratio calculated as total debt (including operating lease liability) divided by total shareholders’ equity. | Western Digital Corp. debt to equity ratio (including operating lease liability) improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023. |
| Debt to capital ratio | A solvency ratio calculated as total debt divided by total debt plus shareholders’ equity. | Western Digital Corp. debt to capital ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023. |
| Debt to capital ratio (including operating lease liability) | A solvency ratio calculated as total debt (including operating lease liability) divided by total debt (including operating lease liability) plus shareholders’ equity. | Western Digital Corp. debt to capital ratio (including operating lease liability) improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023. |
| Debt to assets ratio | A solvency ratio calculated as total debt divided by total assets. | Western Digital Corp. debt to assets ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023. |
| Debt to assets ratio (including operating lease liability) | A solvency ratio calculated as total debt (including operating lease liability) divided by total assets. | Western Digital Corp. debt to assets ratio (including operating lease liability) improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023. |
| Financial leverage ratio | A solvency ratio calculated as total assets divided by total shareholders’ equity. | Western Digital Corp. financial leverage ratio decreased from 2021 to 2022 and from 2022 to 2023. |
| Solvency ratio | Description | The company |
|---|---|---|
| Interest coverage ratio | A solvency ratio calculated as EBIT divided by interest payments. | Western Digital Corp. interest coverage ratio improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023. |
| Fixed charge coverage ratio | A solvency ratio calculated as earnings before fixed charges and tax divided by fixed charges. | Western Digital Corp. fixed charge coverage ratio improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023. |
Debt to Equity
Western Digital Corp., debt to equity calculation, comparison to benchmarks
| Jun 30, 2023 | Jul 1, 2022 | Jul 2, 2021 | Jul 3, 2020 | Jun 28, 2019 | Jun 29, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Current portion of long-term debt | 1,213) | —) | 251) | 286) | 276) | 179) | |
| Long-term debt, less current portion | 5,857) | 7,022) | 8,474) | 9,289) | 10,246) | 10,993) | |
| Total debt | 7,070) | 7,022) | 8,725) | 9,575) | 10,522) | 11,172) | |
| Shareholders’ equity | 11,723) | 12,221) | 10,721) | 9,551) | 9,967) | 11,531) | |
| Solvency Ratio | |||||||
| Debt to equity1 | 0.60 | 0.57 | 0.81 | 1.00 | 1.06 | 0.97 | |
| Benchmarks | |||||||
| Debt to Equity, Competitors2 | |||||||
| Apple Inc. | 1.80 | 2.39 | 1.99 | 1.73 | 1.19 | 1.07 | |
| Arista Networks Inc. | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | — | |
| Cisco Systems Inc. | 0.19 | 0.24 | 0.28 | 0.38 | 0.73 | 0.59 | |
| Super Micro Computer Inc. | 0.15 | 0.42 | 0.09 | 0.03 | 0.03 | 0.14 | |
| Debt to Equity, Sector | |||||||
| Technology Hardware & Equipment | 1.04 | 1.36 | 1.25 | 1.19 | 1.04 | — | |
| Debt to Equity, Industry | |||||||
| Information Technology | 0.63 | 0.67 | 0.77 | 0.88 | 0.88 | — | |
Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-07-01), 10-K (reporting date: 2021-07-02), 10-K (reporting date: 2020-07-03), 10-K (reporting date: 2019-06-28), 10-K (reporting date: 2018-06-29).
1 2023 Calculation
Debt to equity = Total debt ÷ Shareholders’ equity
= 7,070 ÷ 11,723 = 0.60
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Debt to equity ratio | A solvency ratio calculated as total debt divided by total shareholders’ equity. | Western Digital Corp. debt to equity ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023. |
Debt to Equity (including Operating Lease Liability)
Western Digital Corp., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Jun 30, 2023 | Jul 1, 2022 | Jul 2, 2021 | Jul 3, 2020 | Jun 28, 2019 | Jun 29, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Current portion of long-term debt | 1,213) | —) | 251) | 286) | 276) | 179) | |
| Long-term debt, less current portion | 5,857) | 7,022) | 8,474) | 9,289) | 10,246) | 10,993) | |
| Total debt | 7,070) | 7,022) | 8,725) | 9,575) | 10,522) | 11,172) | |
| Current portion of operating lease liabilities (included in Accrued expenses) | 40) | 40) | 33) | 36) | —) | —) | |
| Long-term operating lease liabilities (included in Other liabilities) | 244) | 277) | 204) | 209) | —) | —) | |
| Total debt (including operating lease liability) | 7,354) | 7,339) | 8,962) | 9,820) | 10,522) | 11,172) | |
| Shareholders’ equity | 11,723) | 12,221) | 10,721) | 9,551) | 9,967) | 11,531) | |
| Solvency Ratio | |||||||
| Debt to equity (including operating lease liability)1 | 0.63 | 0.60 | 0.84 | 1.03 | 1.06 | 0.97 | |
| Benchmarks | |||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | |||||||
| Apple Inc. | 1.99 | 2.61 | 2.16 | 1.87 | 1.19 | 1.07 | |
| Arista Networks Inc. | 0.01 | 0.01 | 0.02 | 0.03 | 0.03 | — | |
| Cisco Systems Inc. | 0.21 | 0.27 | 0.31 | 0.41 | 0.73 | 0.59 | |
| Super Micro Computer Inc. | 0.16 | 0.44 | 0.11 | 0.05 | 0.03 | 0.14 | |
| Debt to Equity (including Operating Lease Liability), Sector | |||||||
| Technology Hardware & Equipment | 1.16 | 1.49 | 1.37 | 1.28 | 1.04 | — | |
| Debt to Equity (including Operating Lease Liability), Industry | |||||||
| Information Technology | 0.69 | 0.73 | 0.84 | 0.95 | 0.90 | — | |
Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-07-01), 10-K (reporting date: 2021-07-02), 10-K (reporting date: 2020-07-03), 10-K (reporting date: 2019-06-28), 10-K (reporting date: 2018-06-29).
1 2023 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Shareholders’ equity
= 7,354 ÷ 11,723 = 0.63
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Debt to equity ratio (including operating lease liability) | A solvency ratio calculated as total debt (including operating lease liability) divided by total shareholders’ equity. | Western Digital Corp. debt to equity ratio (including operating lease liability) improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023. |
Debt to Capital
Western Digital Corp., debt to capital calculation, comparison to benchmarks
| Jun 30, 2023 | Jul 1, 2022 | Jul 2, 2021 | Jul 3, 2020 | Jun 28, 2019 | Jun 29, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Current portion of long-term debt | 1,213) | —) | 251) | 286) | 276) | 179) | |
| Long-term debt, less current portion | 5,857) | 7,022) | 8,474) | 9,289) | 10,246) | 10,993) | |
| Total debt | 7,070) | 7,022) | 8,725) | 9,575) | 10,522) | 11,172) | |
| Shareholders’ equity | 11,723) | 12,221) | 10,721) | 9,551) | 9,967) | 11,531) | |
| Total capital | 18,793) | 19,243) | 19,446) | 19,126) | 20,489) | 22,703) | |
| Solvency Ratio | |||||||
| Debt to capital1 | 0.38 | 0.36 | 0.45 | 0.50 | 0.51 | 0.49 | |
| Benchmarks | |||||||
| Debt to Capital, Competitors2 | |||||||
| Apple Inc. | 0.64 | 0.70 | 0.67 | 0.63 | 0.54 | 0.52 | |
| Arista Networks Inc. | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | — | |
| Cisco Systems Inc. | 0.16 | 0.19 | 0.22 | 0.28 | 0.42 | 0.37 | |
| Super Micro Computer Inc. | 0.13 | 0.30 | 0.08 | 0.03 | 0.02 | 0.12 | |
| Debt to Capital, Sector | |||||||
| Technology Hardware & Equipment | 0.51 | 0.58 | 0.56 | 0.54 | 0.51 | — | |
| Debt to Capital, Industry | |||||||
| Information Technology | 0.38 | 0.40 | 0.43 | 0.47 | 0.47 | — | |
Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-07-01), 10-K (reporting date: 2021-07-02), 10-K (reporting date: 2020-07-03), 10-K (reporting date: 2019-06-28), 10-K (reporting date: 2018-06-29).
1 2023 Calculation
Debt to capital = Total debt ÷ Total capital
= 7,070 ÷ 18,793 = 0.38
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Debt to capital ratio | A solvency ratio calculated as total debt divided by total debt plus shareholders’ equity. | Western Digital Corp. debt to capital ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023. |
Debt to Capital (including Operating Lease Liability)
Western Digital Corp., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Jun 30, 2023 | Jul 1, 2022 | Jul 2, 2021 | Jul 3, 2020 | Jun 28, 2019 | Jun 29, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Current portion of long-term debt | 1,213) | —) | 251) | 286) | 276) | 179) | |
| Long-term debt, less current portion | 5,857) | 7,022) | 8,474) | 9,289) | 10,246) | 10,993) | |
| Total debt | 7,070) | 7,022) | 8,725) | 9,575) | 10,522) | 11,172) | |
| Current portion of operating lease liabilities (included in Accrued expenses) | 40) | 40) | 33) | 36) | —) | —) | |
| Long-term operating lease liabilities (included in Other liabilities) | 244) | 277) | 204) | 209) | —) | —) | |
| Total debt (including operating lease liability) | 7,354) | 7,339) | 8,962) | 9,820) | 10,522) | 11,172) | |
| Shareholders’ equity | 11,723) | 12,221) | 10,721) | 9,551) | 9,967) | 11,531) | |
| Total capital (including operating lease liability) | 19,077) | 19,560) | 19,683) | 19,371) | 20,489) | 22,703) | |
| Solvency Ratio | |||||||
| Debt to capital (including operating lease liability)1 | 0.39 | 0.38 | 0.46 | 0.51 | 0.51 | 0.49 | |
| Benchmarks | |||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | |||||||
| Apple Inc. | 0.67 | 0.72 | 0.68 | 0.65 | 0.54 | 0.52 | |
| Arista Networks Inc. | 0.01 | 0.01 | 0.02 | 0.03 | 0.03 | — | |
| Cisco Systems Inc. | 0.18 | 0.21 | 0.24 | 0.29 | 0.42 | 0.37 | |
| Super Micro Computer Inc. | 0.14 | 0.30 | 0.10 | 0.05 | 0.02 | 0.12 | |
| Debt to Capital (including Operating Lease Liability), Sector | |||||||
| Technology Hardware & Equipment | 0.54 | 0.60 | 0.58 | 0.56 | 0.51 | — | |
| Debt to Capital (including Operating Lease Liability), Industry | |||||||
| Information Technology | 0.41 | 0.42 | 0.46 | 0.49 | 0.47 | — | |
Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-07-01), 10-K (reporting date: 2021-07-02), 10-K (reporting date: 2020-07-03), 10-K (reporting date: 2019-06-28), 10-K (reporting date: 2018-06-29).
1 2023 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 7,354 ÷ 19,077 = 0.39
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Debt to capital ratio (including operating lease liability) | A solvency ratio calculated as total debt (including operating lease liability) divided by total debt (including operating lease liability) plus shareholders’ equity. | Western Digital Corp. debt to capital ratio (including operating lease liability) improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023. |
Debt to Assets
Western Digital Corp., debt to assets calculation, comparison to benchmarks
| Jun 30, 2023 | Jul 1, 2022 | Jul 2, 2021 | Jul 3, 2020 | Jun 28, 2019 | Jun 29, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Current portion of long-term debt | 1,213) | —) | 251) | 286) | 276) | 179) | |
| Long-term debt, less current portion | 5,857) | 7,022) | 8,474) | 9,289) | 10,246) | 10,993) | |
| Total debt | 7,070) | 7,022) | 8,725) | 9,575) | 10,522) | 11,172) | |
| Total assets | 24,429) | 26,259) | 26,132) | 25,662) | 26,370) | 29,235) | |
| Solvency Ratio | |||||||
| Debt to assets1 | 0.29 | 0.27 | 0.33 | 0.37 | 0.40 | 0.38 | |
| Benchmarks | |||||||
| Debt to Assets, Competitors2 | |||||||
| Apple Inc. | 0.32 | 0.34 | 0.36 | 0.35 | 0.32 | 0.31 | |
| Arista Networks Inc. | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | — | |
| Cisco Systems Inc. | 0.08 | 0.10 | 0.12 | 0.15 | 0.25 | 0.24 | |
| Super Micro Computer Inc. | 0.08 | 0.19 | 0.04 | 0.02 | 0.01 | 0.07 | |
| Debt to Assets, Sector | |||||||
| Technology Hardware & Equipment | 0.26 | 0.29 | 0.30 | 0.30 | 0.30 | — | |
| Debt to Assets, Industry | |||||||
| Information Technology | 0.26 | 0.26 | 0.28 | 0.30 | 0.31 | — | |
Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-07-01), 10-K (reporting date: 2021-07-02), 10-K (reporting date: 2020-07-03), 10-K (reporting date: 2019-06-28), 10-K (reporting date: 2018-06-29).
1 2023 Calculation
Debt to assets = Total debt ÷ Total assets
= 7,070 ÷ 24,429 = 0.29
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Debt to assets ratio | A solvency ratio calculated as total debt divided by total assets. | Western Digital Corp. debt to assets ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023. |
Debt to Assets (including Operating Lease Liability)
Western Digital Corp., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Jun 30, 2023 | Jul 1, 2022 | Jul 2, 2021 | Jul 3, 2020 | Jun 28, 2019 | Jun 29, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Current portion of long-term debt | 1,213) | —) | 251) | 286) | 276) | 179) | |
| Long-term debt, less current portion | 5,857) | 7,022) | 8,474) | 9,289) | 10,246) | 10,993) | |
| Total debt | 7,070) | 7,022) | 8,725) | 9,575) | 10,522) | 11,172) | |
| Current portion of operating lease liabilities (included in Accrued expenses) | 40) | 40) | 33) | 36) | —) | —) | |
| Long-term operating lease liabilities (included in Other liabilities) | 244) | 277) | 204) | 209) | —) | —) | |
| Total debt (including operating lease liability) | 7,354) | 7,339) | 8,962) | 9,820) | 10,522) | 11,172) | |
| Total assets | 24,429) | 26,259) | 26,132) | 25,662) | 26,370) | 29,235) | |
| Solvency Ratio | |||||||
| Debt to assets (including operating lease liability)1 | 0.30 | 0.28 | 0.34 | 0.38 | 0.40 | 0.38 | |
| Benchmarks | |||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | |||||||
| Apple Inc. | 0.35 | 0.38 | 0.39 | 0.38 | 0.32 | 0.31 | |
| Arista Networks Inc. | 0.01 | 0.01 | 0.01 | 0.02 | 0.02 | — | |
| Cisco Systems Inc. | 0.09 | 0.11 | 0.13 | 0.16 | 0.25 | 0.24 | |
| Super Micro Computer Inc. | 0.08 | 0.19 | 0.05 | 0.03 | 0.01 | 0.07 | |
| Debt to Assets (including Operating Lease Liability), Sector | |||||||
| Technology Hardware & Equipment | 0.29 | 0.31 | 0.33 | 0.32 | 0.30 | — | |
| Debt to Assets (including Operating Lease Liability), Industry | |||||||
| Information Technology | 0.28 | 0.29 | 0.31 | 0.33 | 0.32 | — | |
Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-07-01), 10-K (reporting date: 2021-07-02), 10-K (reporting date: 2020-07-03), 10-K (reporting date: 2019-06-28), 10-K (reporting date: 2018-06-29).
1 2023 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 7,354 ÷ 24,429 = 0.30
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Debt to assets ratio (including operating lease liability) | A solvency ratio calculated as total debt (including operating lease liability) divided by total assets. | Western Digital Corp. debt to assets ratio (including operating lease liability) improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023. |
Financial Leverage
Western Digital Corp., financial leverage calculation, comparison to benchmarks
| Jun 30, 2023 | Jul 1, 2022 | Jul 2, 2021 | Jul 3, 2020 | Jun 28, 2019 | Jun 29, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Total assets | 24,429) | 26,259) | 26,132) | 25,662) | 26,370) | 29,235) | |
| Shareholders’ equity | 11,723) | 12,221) | 10,721) | 9,551) | 9,967) | 11,531) | |
| Solvency Ratio | |||||||
| Financial leverage1 | 2.08 | 2.15 | 2.44 | 2.69 | 2.65 | 2.54 | |
| Benchmarks | |||||||
| Financial Leverage, Competitors2 | |||||||
| Apple Inc. | 5.67 | 6.96 | 5.56 | 4.96 | 3.74 | 3.41 | |
| Arista Networks Inc. | 1.38 | 1.39 | 1.44 | 1.43 | 1.45 | — | |
| Cisco Systems Inc. | 2.30 | 2.36 | 2.36 | 2.50 | 2.91 | 2.52 | |
| Super Micro Computer Inc. | 1.86 | 2.25 | 2.05 | 1.80 | 1.79 | 2.10 | |
| Financial Leverage, Sector | |||||||
| Technology Hardware & Equipment | 4.05 | 4.72 | 4.17 | 3.95 | 3.46 | — | |
| Financial Leverage, Industry | |||||||
| Information Technology | 2.44 | 2.56 | 2.72 | 2.90 | 2.87 | — | |
Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-07-01), 10-K (reporting date: 2021-07-02), 10-K (reporting date: 2020-07-03), 10-K (reporting date: 2019-06-28), 10-K (reporting date: 2018-06-29).
1 2023 Calculation
Financial leverage = Total assets ÷ Shareholders’ equity
= 24,429 ÷ 11,723 = 2.08
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Financial leverage ratio | A solvency ratio calculated as total assets divided by total shareholders’ equity. | Western Digital Corp. financial leverage ratio decreased from 2021 to 2022 and from 2022 to 2023. |
Interest Coverage
Western Digital Corp., interest coverage calculation, comparison to benchmarks
| Jun 30, 2023 | Jul 1, 2022 | Jul 2, 2021 | Jul 3, 2020 | Jun 28, 2019 | Jun 29, 2018 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net income (loss) | (1,706) | 1,500) | 821) | (250) | (754) | 675) | |
| Add: Income tax expense | 146) | 623) | 106) | 204) | 467) | 1,410) | |
| Add: Interest expense | 312) | 304) | 326) | 413) | 469) | 676) | |
| Earnings before interest and tax (EBIT) | (1,248) | 2,427) | 1,253) | 367) | 182) | 2,761) | |
| Solvency Ratio | |||||||
| Interest coverage1 | -4.00 | 7.98 | 3.84 | 0.89 | 0.39 | 4.08 | |
| Benchmarks | |||||||
| Interest Coverage, Competitors2 | |||||||
| Apple Inc. | 29.92 | 41.64 | 42.29 | 24.35 | 19.38 | 23.50 | |
| Arista Networks Inc. | — | — | — | — | — | — | |
| Cisco Systems Inc. | 36.87 | 41.21 | 31.56 | 24.88 | 17.96 | 14.83 | |
| Super Micro Computer Inc. | 72.55 | 53.71 | 48.81 | 40.01 | 13.97 | 15.78 | |
| Interest Coverage, Sector | |||||||
| Technology Hardware & Equipment | 31.25 | 42.09 | 41.08 | 24.67 | 19.29 | — | |
| Interest Coverage, Industry | |||||||
| Information Technology | 18.91 | 24.76 | 22.93 | 16.69 | 15.79 | — | |
Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-07-01), 10-K (reporting date: 2021-07-02), 10-K (reporting date: 2020-07-03), 10-K (reporting date: 2019-06-28), 10-K (reporting date: 2018-06-29).
1 2023 Calculation
Interest coverage = EBIT ÷ Interest expense
= -1,248 ÷ 312 = -4.00
2 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Interest coverage ratio | A solvency ratio calculated as EBIT divided by interest payments. | Western Digital Corp. interest coverage ratio improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023. |
Fixed Charge Coverage
Western Digital Corp., fixed charge coverage calculation, comparison to benchmarks
| Jun 30, 2023 | Jul 1, 2022 | Jul 2, 2021 | Jul 3, 2020 | Jun 28, 2019 | Jun 29, 2018 | ||
|---|---|---|---|---|---|---|---|
| U.S. Federal statutory tax rate | 21.00% | 21.00% | 21.00% | 21.00% | 21.00% | 28.00% | |
| Selected Financial Data (US$ in millions) | |||||||
| Net income (loss) | (1,706) | 1,500) | 821) | (250) | (754) | 675) | |
| Add: Income tax expense | 146) | 623) | 106) | 204) | 467) | 1,410) | |
| Add: Interest expense | 312) | 304) | 326) | 413) | 469) | 676) | |
| Earnings before interest and tax (EBIT) | (1,248) | 2,427) | 1,253) | 367) | 182) | 2,761) | |
| Add: Cost of operating leases | 57) | 58) | 50) | 55) | 47) | 49) | |
| Earnings before fixed charges and tax | (1,191) | 2,485) | 1,303) | 422) | 229) | 2,810) | |
| Interest expense | 312) | 304) | 326) | 413) | 469) | 676) | |
| Cost of operating leases | 57) | 58) | 50) | 55) | 47) | 49) | |
| Cumulative dividends allocated to preferred shareholders | 24) | —) | —) | —) | —) | —) | |
| Cumulative dividends allocated to preferred shareholders, tax adjustment1 | 6) | —) | —) | —) | —) | —) | |
| Cumulative dividends allocated to preferred shareholders, after tax adjustment | 30) | —) | —) | —) | —) | —) | |
| Fixed charges | 399) | 362) | 376) | 468) | 516) | 725) | |
| Solvency Ratio | |||||||
| Fixed charge coverage2 | -2.98 | 6.86 | 3.47 | 0.90 | 0.44 | 3.88 | |
| Benchmarks | |||||||
| Fixed Charge Coverage, Competitors3 | |||||||
| Apple Inc. | 28.52 | 25.65 | 26.13 | 16.34 | 14.48 | 17.42 | |
| Arista Networks Inc. | 73.83 | 49.20 | 31.02 | 24.95 | 30.94 | — | |
| Cisco Systems Inc. | 18.98 | 20.30 | 16.92 | 14.79 | 12.28 | 10.41 | |
| Super Micro Computer Inc. | 40.95 | 24.03 | 12.52 | 10.45 | 7.48 | 8.28 | |
| Fixed Charge Coverage, Sector | |||||||
| Technology Hardware & Equipment | 27.25 | 25.07 | 24.67 | 16.09 | 14.08 | — | |
| Fixed Charge Coverage, Industry | |||||||
| Information Technology | 12.67 | 14.28 | 13.50 | 10.20 | 10.46 | — | |
Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-07-01), 10-K (reporting date: 2021-07-02), 10-K (reporting date: 2020-07-03), 10-K (reporting date: 2019-06-28), 10-K (reporting date: 2018-06-29).
1 2023 Calculation
Cumulative dividends allocated to preferred shareholders, tax adjustment = (Cumulative dividends allocated to preferred shareholders × U.S. Federal statutory tax rate) ÷ (1 − U.S. Federal statutory tax rate)
= (24 × 21.00%) ÷ (1 − 21.00%) = 6
2 2023 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= -1,191 ÷ 399 = -2.98
3 Click competitor name to see calculations.
| Solvency ratio | Description | The company |
|---|---|---|
| Fixed charge coverage ratio | A solvency ratio calculated as earnings before fixed charges and tax divided by fixed charges. | Western Digital Corp. fixed charge coverage ratio improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023. |