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)
Palo Alto Networks Inc., solvency ratios
Based on: 10-K (reporting date: 2025-07-31), 10-K (reporting date: 2024-07-31), 10-K (reporting date: 2023-07-31), 10-K (reporting date: 2022-07-31), 10-K (reporting date: 2021-07-31), 10-K (reporting date: 2020-07-31).
- Debt to Equity
- The debt to equity ratio exhibited a significant increase from 2.8 in 2020 to a peak of 17.51 in 2022, indicating a substantial rise in leverage relative to equity during this period. Subsequently, the ratio sharply declined to 1.14 in 2023 and further decreased to 0.19 by 2024, suggesting a notable reduction in reliance on debt financing relative to equity.
- Debt to Equity (Including Operating Lease Liability)
- This ratio followed a similar trajectory, increasing from 3.16 in 2020 to 19.12 in 2022, before falling to 1.33 in 2023 and 0.27 in 2024. The inclusion of operating lease liabilities slightly raised the ratios but the overall trend mirrored the traditional debt to equity ratio, reflecting improved leverage management in recent years.
- Debt to Capital
- The debt to capital ratio increased steadily from 0.74 in 2020 to a high of 0.95 in 2022, indicating that debt made up a larger portion of total capital over this period. Thereafter, it declined notably to 0.53 in 2023 and then to 0.16 in 2024, demonstrating a marked deleveraging effort and stronger capital structure.
- Debt to Capital (Including Operating Lease Liability)
- Inclusion of operating lease liabilities resulted in marginally higher ratios, rising from 0.76 in 2020 to 0.95 in 2022, then dropping to 0.57 in 2023 and 0.21 in 2024. The trend highlights a consistent approach to lowering overall leverage while accounting for lease obligations.
- Debt to Assets
- This ratio decreased from 0.34 in 2020 to 0.3 in 2022, suggesting a slight reduction in debt relative to total assets initially, followed by a more pronounced decline to 0.14 in 2023 and 0.05 in 2024. This trend points toward strengthening asset coverage and lower financial risk.
- Debt to Assets (Including Operating Lease Liability)
- With operating lease liabilities considered, the ratio was higher, starting at 0.38 in 2020 and decreasing to 0.33 in 2022. The subsequent years showed a significant drop to 0.16 in 2023 and 0.07 in 2024, reflecting improvements in asset-backed debt coverage even when lease obligations are included.
- Financial Leverage
- Financial leverage peaked dramatically at 58.35 in 2022 from 8.23 in 2020, indicating a significant increase in total assets relative to equity during that period. The ratio then sharply declined to 8.29 in 2023 and further to 3.87 in 2024, suggesting a substantial strengthening of equity relative to assets and a reduction in financial risk.
- Interest Coverage
- The interest coverage ratio was negative and deteriorated from -1.61 in 2020 to -6.56 in 2022, indicating insufficient earnings to cover interest expenses during this period. Beginning in 2023, there was a dramatic improvement to positive coverage of 21.82, surging further to exceptionally high levels of 120.07 in 2024 and 532.9 in 2025, signifying a strong capacity to meet interest obligations and enhanced profitability.
- Fixed Charge Coverage
- This ratio remained negative from 2020 through 2022, ranging from -0.52 to -1.18, indicating inadequate earnings to cover fixed charges. Improvement commenced in 2023 with a positive ratio of 7.2, further increasing to 12.78 in 2024 and 18.52 in 2025. This reflects an enhanced ability to cover fixed financial obligations consistently.
Debt Ratios
Coverage Ratios
Debt to Equity
Palo Alto Networks Inc., debt to equity calculation, comparison to benchmarks
| Jul 31, 2025 | Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | Jul 31, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Current portion of convertible senior notes, net | —) | 963,900) | 1,991,500) | 3,676,800) | 1,557,900) | —) | |
| Convertible senior notes, net, excluding current portion | —) | —) | —) | —) | 1,668,100) | 3,084,100) | |
| Total debt | —) | 963,900) | 1,991,500) | 3,676,800) | 3,226,000) | 3,084,100) | |
| Stockholders’ equity | 7,824,400) | 5,169,700) | 1,748,400) | 210,000) | 634,500) | 1,101,800) | |
| Solvency Ratio | |||||||
| Debt to equity1 | 0.00 | 0.19 | 1.14 | 17.51 | 5.08 | 2.80 | |
| Benchmarks | |||||||
| Debt to Equity, Competitors2 | |||||||
| Accenture PLC | — | 0.04 | 0.01 | 0.00 | 0.00 | 0.00 | |
| Adobe Inc. | — | 0.40 | 0.22 | 0.29 | 0.28 | 0.31 | |
| Cadence Design Systems Inc. | — | 0.53 | 0.19 | 0.27 | 0.13 | 0.14 | |
| CrowdStrike Holdings Inc. | 0.23 | 0.32 | 0.51 | 0.72 | 0.85 | 0.00 | |
| Datadog Inc. | — | 0.59 | 0.37 | 0.52 | 0.71 | 0.60 | |
| Fair Isaac Corp. | — | — | — | — | — | 2.54 | |
| International Business Machines Corp. | — | 2.01 | 2.51 | 2.32 | 2.74 | 2.99 | |
| Intuit Inc. | 0.30 | 0.33 | 0.35 | 0.42 | 0.21 | 0.66 | |
| Microsoft Corp. | 0.26 | 0.29 | 0.31 | 0.39 | 0.50 | 0.62 | |
| Oracle Corp. | 4.67 | 9.98 | 84.33 | — | 16.08 | 5.93 | |
| Palantir Technologies Inc. | — | 0.00 | 0.00 | 0.00 | 0.00 | 0.13 | |
| Salesforce Inc. | 0.15 | 0.17 | 0.20 | 0.19 | 0.07 | 0.09 | |
| ServiceNow Inc. | — | 0.15 | 0.20 | 0.30 | 0.43 | 0.58 | |
| Synopsys Inc. | — | 0.00 | 0.00 | 0.00 | 0.02 | 0.03 | |
| Workday Inc. | 0.33 | 0.37 | 0.53 | 0.41 | 0.55 | 0.51 | |
| Debt to Equity, Sector | |||||||
| Software & Services | — | 0.54 | 0.64 | 0.71 | 0.83 | 0.95 | |
| Debt to Equity, Industry | |||||||
| Information Technology | — | 0.61 | 0.66 | 0.71 | 0.83 | 0.97 | |
Based on: 10-K (reporting date: 2025-07-31), 10-K (reporting date: 2024-07-31), 10-K (reporting date: 2023-07-31), 10-K (reporting date: 2022-07-31), 10-K (reporting date: 2021-07-31), 10-K (reporting date: 2020-07-31).
1 2025 Calculation
Debt to equity = Total debt ÷ Stockholders’ equity
= 0 ÷ 7,824,400 = 0.00
2 Click competitor name to see calculations.
- Total Debt
- The total debt exhibited a fluctuating trend over the observed periods. Initially, it increased from approximately $3.08 billion in 2020 to reach a peak of about $3.68 billion in 2022. Subsequently, there was a significant reduction in total debt, falling to roughly $1.99 billion in 2023 and further declining to approximately $963.9 million in 2024. This marked decrease suggests a strategic effort to deleverage the balance sheet or repay outstanding obligations over these years.
- Stockholders’ Equity
- Stockholders’ equity demonstrated a volatile pattern during the timeframe examined. From $1.1 billion in 2020, equity dropped substantially to $634.5 million in 2021 and then further declined sharply to $210 million in 2022, indicating a period of diminished retained earnings or possible losses. However, from 2023 onwards, stockholders’ equity experienced robust growth, surging to $1.75 billion in 2023 and continuing this positive momentum to $5.17 billion in 2024 and reaching $7.82 billion in 2025. This rapid increase reflects significant improvement in financial strength and capital base.
- Debt to Equity Ratio
- The debt to equity ratio shows a pronounced volatility consistent with movements in both debt and equity. Starting at a moderate 2.8 in 2020, the ratio escalated sharply to 5.08 in 2021, peaking at an elevated 17.51 in 2022. This peak indicates an extreme leverage position relative to the company’s equity at that time. However, a dramatic reduction followed, with the ratio falling to 1.14 in 2023 and further declining to a low 0.19 in 2024. These decreasing figures indicate a substantial improvement in the company's capital structure, moving from a highly leveraged position to a much more conservative and stable financial footing.
Debt to Equity (including Operating Lease Liability)
Palo Alto Networks Inc., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Jul 31, 2025 | Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | Jul 31, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Current portion of convertible senior notes, net | —) | 963,900) | 1,991,500) | 3,676,800) | 1,557,900) | —) | |
| Convertible senior notes, net, excluding current portion | —) | —) | —) | —) | 1,668,100) | 3,084,100) | |
| Total debt | —) | 963,900) | 1,991,500) | 3,676,800) | 3,226,000) | 3,084,100) | |
| Current portion of operating lease liabilities (included in Accrued and other liabilities) | 79,200) | 65,900) | 60,200) | 62,300) | 65,800) | 57,900) | |
| Long-term operating lease liabilities | 338,200) | 380,500) | 279,200) | 276,100) | 313,400) | 336,600) | |
| Total debt (including operating lease liability) | 417,400) | 1,410,300) | 2,330,900) | 4,015,200) | 3,605,200) | 3,478,600) | |
| Stockholders’ equity | 7,824,400) | 5,169,700) | 1,748,400) | 210,000) | 634,500) | 1,101,800) | |
| Solvency Ratio | |||||||
| Debt to equity (including operating lease liability)1 | 0.05 | 0.27 | 1.33 | 19.12 | 5.68 | 3.16 | |
| Benchmarks | |||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | |||||||
| Accenture PLC | — | 0.15 | 0.12 | 0.15 | 0.18 | 0.21 | |
| Adobe Inc. | — | 0.43 | 0.25 | 0.33 | 0.32 | 0.35 | |
| Cadence Design Systems Inc. | — | 0.56 | 0.24 | 0.34 | 0.18 | 0.20 | |
| CrowdStrike Holdings Inc. | 0.24 | 0.34 | 0.54 | 0.76 | 0.89 | 0.00 | |
| Datadog Inc. | — | 0.68 | 0.45 | 0.59 | 0.78 | 0.67 | |
| Fair Isaac Corp. | — | — | — | — | — | 2.83 | |
| International Business Machines Corp. | — | 2.14 | 2.66 | 2.46 | 2.92 | 3.23 | |
| Intuit Inc. | 0.34 | 0.36 | 0.39 | 0.46 | 0.25 | 0.71 | |
| Microsoft Corp. | 0.33 | 0.36 | 0.39 | 0.47 | 0.58 | 0.69 | |
| Oracle Corp. | 5.33 | 10.85 | 88.84 | — | 16.61 | 6.10 | |
| Palantir Technologies Inc. | — | 0.05 | 0.07 | 0.10 | 0.11 | 0.30 | |
| Salesforce Inc. | 0.20 | 0.23 | 0.25 | 0.25 | 0.15 | 0.18 | |
| ServiceNow Inc. | — | 0.24 | 0.30 | 0.44 | 0.60 | 0.75 | |
| Synopsys Inc. | — | 0.08 | 0.11 | 0.12 | 0.13 | 0.14 | |
| Workday Inc. | 0.37 | 0.41 | 0.58 | 0.46 | 0.68 | 0.63 | |
| Debt to Equity (including Operating Lease Liability), Sector | |||||||
| Software & Services | — | 0.63 | 0.73 | 0.81 | 0.94 | 1.06 | |
| Debt to Equity (including Operating Lease Liability), Industry | |||||||
| Information Technology | — | 0.67 | 0.72 | 0.77 | 0.91 | 1.04 | |
Based on: 10-K (reporting date: 2025-07-31), 10-K (reporting date: 2024-07-31), 10-K (reporting date: 2023-07-31), 10-K (reporting date: 2022-07-31), 10-K (reporting date: 2021-07-31), 10-K (reporting date: 2020-07-31).
1 2025 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Stockholders’ equity
= 417,400 ÷ 7,824,400 = 0.05
2 Click competitor name to see calculations.
- Total Debt (including operating lease liability)
-
Total debt initially increased steadily from 3,478,600 thousand USD in 2020 to a peak of 4,015,200 thousand USD in 2022. Following that peak, there was a pronounced decline over the next three years, dropping significantly to 417,400 thousand USD by 2025.
- Stockholders’ Equity
-
Stockholders’ equity showed a contrasting trend compared to total debt. It dropped sharply from 1,101,800 thousand USD in 2020 to a low of 210,000 thousand USD in 2022. After 2022, equity recovered strongly, sharply increasing to 7,824,400 thousand USD by 2025, suggesting a substantial strengthening of the company’s net asset base.
- Debt to Equity Ratio (including operating lease liability)
-
The debt to equity ratio experienced considerable volatility. The ratio more than doubled from 3.16 in 2020 to 5.68 in 2021, before peaking dramatically at 19.12 in 2022. This peak reflects the combination of high debt and considerably diminished equity that year. From 2022 onward, the ratio reversed sharply, falling to 0.05 by 2025, indicating a significant reduction in leverage and a much stronger equity position relative to debt.
- Overall Analysis
-
The data reveals a period of increased leverage and elevated debt levels through 2022, coinciding with a marked depletion of stockholders’ equity. This situation reversed markedly thereafter, with a strategic reduction in debt and a strong recovery of equity. The resulting low debt to equity ratio by 2025 indicates a shift toward a more conservative capital structure and potentially improved financial stability.
Debt to Capital
Palo Alto Networks Inc., debt to capital calculation, comparison to benchmarks
| Jul 31, 2025 | Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | Jul 31, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Current portion of convertible senior notes, net | —) | 963,900) | 1,991,500) | 3,676,800) | 1,557,900) | —) | |
| Convertible senior notes, net, excluding current portion | —) | —) | —) | —) | 1,668,100) | 3,084,100) | |
| Total debt | —) | 963,900) | 1,991,500) | 3,676,800) | 3,226,000) | 3,084,100) | |
| Stockholders’ equity | 7,824,400) | 5,169,700) | 1,748,400) | 210,000) | 634,500) | 1,101,800) | |
| Total capital | 7,824,400) | 6,133,600) | 3,739,900) | 3,886,800) | 3,860,500) | 4,185,900) | |
| Solvency Ratio | |||||||
| Debt to capital1 | 0.00 | 0.16 | 0.53 | 0.95 | 0.84 | 0.74 | |
| Benchmarks | |||||||
| Debt to Capital, Competitors2 | |||||||
| Accenture PLC | — | 0.03 | 0.01 | 0.00 | 0.00 | 0.00 | |
| Adobe Inc. | — | 0.29 | 0.18 | 0.23 | 0.22 | 0.24 | |
| Cadence Design Systems Inc. | — | 0.35 | 0.16 | 0.21 | 0.11 | 0.12 | |
| CrowdStrike Holdings Inc. | 0.18 | 0.24 | 0.34 | 0.42 | 0.46 | 0.00 | |
| Datadog Inc. | — | 0.37 | 0.27 | 0.34 | 0.41 | 0.38 | |
| Fair Isaac Corp. | — | 1.77 | 1.59 | 1.76 | 1.10 | 0.72 | |
| International Business Machines Corp. | — | 0.67 | 0.72 | 0.70 | 0.73 | 0.75 | |
| Intuit Inc. | 0.23 | 0.25 | 0.26 | 0.30 | 0.17 | 0.40 | |
| Microsoft Corp. | 0.21 | 0.23 | 0.24 | 0.28 | 0.33 | 0.38 | |
| Oracle Corp. | 0.82 | 0.91 | 0.99 | 1.09 | 0.94 | 0.86 | |
| Palantir Technologies Inc. | — | 0.00 | 0.00 | 0.00 | 0.00 | 0.12 | |
| Salesforce Inc. | 0.13 | 0.15 | 0.16 | 0.16 | 0.06 | 0.08 | |
| ServiceNow Inc. | — | 0.13 | 0.16 | 0.23 | 0.30 | 0.37 | |
| Synopsys Inc. | — | 0.00 | 0.00 | 0.00 | 0.02 | 0.03 | |
| Workday Inc. | 0.25 | 0.27 | 0.35 | 0.29 | 0.35 | 0.34 | |
| Debt to Capital, Sector | |||||||
| Software & Services | — | 0.35 | 0.39 | 0.42 | 0.45 | 0.49 | |
| Debt to Capital, Industry | |||||||
| Information Technology | — | 0.38 | 0.40 | 0.41 | 0.45 | 0.49 | |
Based on: 10-K (reporting date: 2025-07-31), 10-K (reporting date: 2024-07-31), 10-K (reporting date: 2023-07-31), 10-K (reporting date: 2022-07-31), 10-K (reporting date: 2021-07-31), 10-K (reporting date: 2020-07-31).
1 2025 Calculation
Debt to capital = Total debt ÷ Total capital
= 0 ÷ 7,824,400 = 0.00
2 Click competitor name to see calculations.
- Total Debt
- The total debt showed an increasing trend from July 31, 2020, reaching its peak in July 31, 2022, at $3,676,800 thousand. Subsequently, it declined sharply to $1,991,500 thousand by July 31, 2023, and further decreased to $963,900 thousand by July 31, 2024. This indicates a significant reduction in leverage over the recent years.
- Total Capital
- Total capital experienced fluctuations over the period. It initially decreased from $4,185,900 thousand in July 31, 2020, to $3,730,900 thousand in July 31, 2023. However, there was a substantial increase to $6,133,600 thousand in July 31, 2024, followed by a further rise projected to $7,824,400 thousand in July 31, 2025. This suggests strong capital growth and improved financial foundation projected beyond 2023.
- Debt to Capital Ratio
- The debt to capital ratio demonstrates a notable trend. It increased steadily from 0.74 in 2020 to a peak of 0.95 in 2022, indicating a high leverage level at that time. Then, it declined significantly to 0.53 in 2023 and further dropped to 0.16 in 2024, highlighting a drastic reduction in debt relative to capital. This downward trend aligns with the decreasing total debt and increasing total capital, reflecting an improving leverage position and financial stability.
Debt to Capital (including Operating Lease Liability)
Palo Alto Networks Inc., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Jul 31, 2025 | Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | Jul 31, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Current portion of convertible senior notes, net | —) | 963,900) | 1,991,500) | 3,676,800) | 1,557,900) | —) | |
| Convertible senior notes, net, excluding current portion | —) | —) | —) | —) | 1,668,100) | 3,084,100) | |
| Total debt | —) | 963,900) | 1,991,500) | 3,676,800) | 3,226,000) | 3,084,100) | |
| Current portion of operating lease liabilities (included in Accrued and other liabilities) | 79,200) | 65,900) | 60,200) | 62,300) | 65,800) | 57,900) | |
| Long-term operating lease liabilities | 338,200) | 380,500) | 279,200) | 276,100) | 313,400) | 336,600) | |
| Total debt (including operating lease liability) | 417,400) | 1,410,300) | 2,330,900) | 4,015,200) | 3,605,200) | 3,478,600) | |
| Stockholders’ equity | 7,824,400) | 5,169,700) | 1,748,400) | 210,000) | 634,500) | 1,101,800) | |
| Total capital (including operating lease liability) | 8,241,800) | 6,580,000) | 4,079,300) | 4,225,200) | 4,239,700) | 4,580,400) | |
| Solvency Ratio | |||||||
| Debt to capital (including operating lease liability)1 | 0.05 | 0.21 | 0.57 | 0.95 | 0.85 | 0.76 | |
| Benchmarks | |||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | |||||||
| Accenture PLC | — | 0.13 | 0.11 | 0.13 | 0.15 | 0.17 | |
| Adobe Inc. | — | 0.30 | 0.20 | 0.25 | 0.24 | 0.26 | |
| Cadence Design Systems Inc. | — | 0.36 | 0.19 | 0.25 | 0.15 | 0.17 | |
| CrowdStrike Holdings Inc. | 0.19 | 0.26 | 0.35 | 0.43 | 0.47 | 0.00 | |
| Datadog Inc. | — | 0.40 | 0.31 | 0.37 | 0.44 | 0.40 | |
| Fair Isaac Corp. | — | 1.75 | 1.57 | 1.72 | 1.09 | 0.74 | |
| International Business Machines Corp. | — | 0.68 | 0.73 | 0.71 | 0.74 | 0.76 | |
| Intuit Inc. | 0.25 | 0.26 | 0.28 | 0.31 | 0.20 | 0.42 | |
| Microsoft Corp. | 0.25 | 0.27 | 0.28 | 0.32 | 0.37 | 0.41 | |
| Oracle Corp. | 0.84 | 0.92 | 0.99 | 1.08 | 0.94 | 0.86 | |
| Palantir Technologies Inc. | — | 0.05 | 0.06 | 0.09 | 0.10 | 0.23 | |
| Salesforce Inc. | 0.16 | 0.19 | 0.20 | 0.20 | 0.13 | 0.16 | |
| ServiceNow Inc. | — | 0.19 | 0.23 | 0.31 | 0.37 | 0.43 | |
| Synopsys Inc. | — | 0.07 | 0.10 | 0.11 | 0.11 | 0.12 | |
| Workday Inc. | 0.27 | 0.29 | 0.37 | 0.32 | 0.41 | 0.39 | |
| Debt to Capital (including Operating Lease Liability), Sector | |||||||
| Software & Services | — | 0.39 | 0.42 | 0.45 | 0.48 | 0.51 | |
| Debt to Capital (including Operating Lease Liability), Industry | |||||||
| Information Technology | — | 0.40 | 0.42 | 0.44 | 0.48 | 0.51 | |
Based on: 10-K (reporting date: 2025-07-31), 10-K (reporting date: 2024-07-31), 10-K (reporting date: 2023-07-31), 10-K (reporting date: 2022-07-31), 10-K (reporting date: 2021-07-31), 10-K (reporting date: 2020-07-31).
1 2025 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 417,400 ÷ 8,241,800 = 0.05
2 Click competitor name to see calculations.
- Total Debt (Including Operating Lease Liability)
- The total debt exhibited a fluctuating trend over the observed periods. Initially, there was a moderate increase from approximately 3.48 billion US dollars in 2020 to around 4.02 billion in 2022. Subsequently, a significant reduction occurred, with total debt decreasing sharply to roughly 1.41 billion by 2024 and further declining to approximately 417 million in 2025. This pattern indicates a strong deleveraging effort by the company in the later years.
- Total Capital (Including Operating Lease Liability)
- Total capital demonstrated variability but an overall upward trajectory towards the end of the period. Starting at about 4.58 billion US dollars in 2020, it experienced a slight decline through 2023, stabilizing around 4.08 billion. However, a marked increase followed, with total capital rising steeply to 6.58 billion in 2024 and then to 8.24 billion in 2025. This surge suggests potential capital infusions or retained earnings accumulation contributing to the company's capital base.
- Debt to Capital Ratio (Including Operating Lease Liability)
- The debt to capital ratio started at a relatively high level of 0.76 in 2020 and increased to 0.95 by 2022, indicating a peak in leverage. Following this peak, the ratio showed a pronounced downward trend, falling significantly to 0.57 in 2023, 0.21 in 2024, and reaching a low of 0.05 by 2025. This decline aligns with the reduction in total debt and increase in total capital, suggesting the company has substantially strengthened its financial structure by lowering its reliance on debt financing.
Debt to Assets
Palo Alto Networks Inc., debt to assets calculation, comparison to benchmarks
| Jul 31, 2025 | Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | Jul 31, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Current portion of convertible senior notes, net | —) | 963,900) | 1,991,500) | 3,676,800) | 1,557,900) | —) | |
| Convertible senior notes, net, excluding current portion | —) | —) | —) | —) | 1,668,100) | 3,084,100) | |
| Total debt | —) | 963,900) | 1,991,500) | 3,676,800) | 3,226,000) | 3,084,100) | |
| Total assets | 23,576,200) | 19,990,900) | 14,501,100) | 12,253,600) | 10,241,600) | 9,065,400) | |
| Solvency Ratio | |||||||
| Debt to assets1 | 0.00 | 0.05 | 0.14 | 0.30 | 0.31 | 0.34 | |
| Benchmarks | |||||||
| Debt to Assets, Competitors2 | |||||||
| Accenture PLC | — | 0.02 | 0.00 | 0.00 | 0.00 | 0.00 | |
| Adobe Inc. | — | 0.19 | 0.12 | 0.15 | 0.15 | 0.17 | |
| Cadence Design Systems Inc. | — | 0.28 | 0.11 | 0.15 | 0.08 | 0.09 | |
| CrowdStrike Holdings Inc. | 0.09 | 0.11 | 0.15 | 0.20 | 0.27 | 0.00 | |
| Datadog Inc. | — | 0.28 | 0.19 | 0.25 | 0.31 | 0.30 | |
| Fair Isaac Corp. | — | 1.29 | 1.18 | 1.29 | 0.80 | 0.52 | |
| International Business Machines Corp. | — | 0.40 | 0.42 | 0.40 | 0.39 | 0.39 | |
| Intuit Inc. | 0.16 | 0.19 | 0.22 | 0.25 | 0.13 | 0.31 | |
| Microsoft Corp. | 0.14 | 0.15 | 0.16 | 0.18 | 0.21 | 0.24 | |
| Oracle Corp. | 0.57 | 0.62 | 0.67 | 0.69 | 0.64 | 0.62 | |
| Palantir Technologies Inc. | — | 0.00 | 0.00 | 0.00 | 0.00 | 0.07 | |
| Salesforce Inc. | 0.09 | 0.10 | 0.12 | 0.12 | 0.04 | 0.06 | |
| ServiceNow Inc. | — | 0.07 | 0.09 | 0.11 | 0.15 | 0.19 | |
| Synopsys Inc. | — | 0.00 | 0.00 | 0.00 | 0.01 | 0.02 | |
| Workday Inc. | 0.17 | 0.18 | 0.22 | 0.18 | 0.21 | 0.19 | |
| Debt to Assets, Sector | |||||||
| Software & Services | — | 0.23 | 0.25 | 0.26 | 0.28 | 0.30 | |
| Debt to Assets, Industry | |||||||
| Information Technology | — | 0.25 | 0.26 | 0.26 | 0.29 | 0.31 | |
Based on: 10-K (reporting date: 2025-07-31), 10-K (reporting date: 2024-07-31), 10-K (reporting date: 2023-07-31), 10-K (reporting date: 2022-07-31), 10-K (reporting date: 2021-07-31), 10-K (reporting date: 2020-07-31).
1 2025 Calculation
Debt to assets = Total debt ÷ Total assets
= 0 ÷ 23,576,200 = 0.00
2 Click competitor name to see calculations.
- Total Debt
- The total debt exhibited an initial upward trend from 3,084,100 thousand USD in July 2020 to a peak of 3,676,800 thousand USD in July 2022. Subsequently, a significant reduction occurred, with total debt declining sharply to 1,991,500 thousand USD by July 2023, and further to 963,900 thousand USD by July 2024. This marks a noticeable deleveraging initiative or debt repayment strategy during the latter periods.
- Total Assets
- Total assets consistently increased over the entire timeframe. Starting at 9,065,400 thousand USD in July 2020, assets rose steadily each year, reaching 23,576,200 thousand USD by July 2025. This represents more than a twofold increase over five years, indicating ongoing asset growth potentially driven by investments, acquisitions, or organic growth.
- Debt to Assets Ratio
- The debt to assets ratio declined steadily from 0.34 in July 2020 to 0.05 by July 2024. This decreasing ratio signals a strong reduction in leverage relative to the asset base. The most pronounced drop occurred between July 2022 and July 2024, correlating with the substantial decrease in total debt and the continuous increase in total assets.
Debt to Assets (including Operating Lease Liability)
Palo Alto Networks Inc., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Jul 31, 2025 | Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | Jul 31, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Current portion of convertible senior notes, net | —) | 963,900) | 1,991,500) | 3,676,800) | 1,557,900) | —) | |
| Convertible senior notes, net, excluding current portion | —) | —) | —) | —) | 1,668,100) | 3,084,100) | |
| Total debt | —) | 963,900) | 1,991,500) | 3,676,800) | 3,226,000) | 3,084,100) | |
| Current portion of operating lease liabilities (included in Accrued and other liabilities) | 79,200) | 65,900) | 60,200) | 62,300) | 65,800) | 57,900) | |
| Long-term operating lease liabilities | 338,200) | 380,500) | 279,200) | 276,100) | 313,400) | 336,600) | |
| Total debt (including operating lease liability) | 417,400) | 1,410,300) | 2,330,900) | 4,015,200) | 3,605,200) | 3,478,600) | |
| Total assets | 23,576,200) | 19,990,900) | 14,501,100) | 12,253,600) | 10,241,600) | 9,065,400) | |
| Solvency Ratio | |||||||
| Debt to assets (including operating lease liability)1 | 0.02 | 0.07 | 0.16 | 0.33 | 0.35 | 0.38 | |
| Benchmarks | |||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | |||||||
| Accenture PLC | — | 0.07 | 0.06 | 0.07 | 0.08 | 0.09 | |
| Adobe Inc. | — | 0.20 | 0.14 | 0.17 | 0.17 | 0.19 | |
| Cadence Design Systems Inc. | — | 0.29 | 0.14 | 0.18 | 0.11 | 0.13 | |
| CrowdStrike Holdings Inc. | 0.09 | 0.12 | 0.16 | 0.21 | 0.29 | 0.00 | |
| Datadog Inc. | — | 0.32 | 0.23 | 0.28 | 0.34 | 0.34 | |
| Fair Isaac Corp. | — | 1.31 | 1.21 | 1.33 | 0.85 | 0.58 | |
| International Business Machines Corp. | — | 0.43 | 0.44 | 0.42 | 0.42 | 0.43 | |
| Intuit Inc. | 0.18 | 0.20 | 0.24 | 0.27 | 0.16 | 0.33 | |
| Microsoft Corp. | 0.18 | 0.19 | 0.19 | 0.21 | 0.25 | 0.27 | |
| Oracle Corp. | 0.65 | 0.67 | 0.71 | 0.73 | 0.66 | 0.64 | |
| Palantir Technologies Inc. | — | 0.04 | 0.05 | 0.07 | 0.08 | 0.17 | |
| Salesforce Inc. | 0.12 | 0.14 | 0.15 | 0.15 | 0.10 | 0.11 | |
| ServiceNow Inc. | — | 0.11 | 0.13 | 0.17 | 0.21 | 0.24 | |
| Synopsys Inc. | — | 0.05 | 0.07 | 0.07 | 0.08 | 0.08 | |
| Workday Inc. | 0.19 | 0.20 | 0.24 | 0.20 | 0.26 | 0.23 | |
| Debt to Assets (including Operating Lease Liability), Sector | |||||||
| Software & Services | — | 0.27 | 0.29 | 0.30 | 0.32 | 0.34 | |
| Debt to Assets (including Operating Lease Liability), Industry | |||||||
| Information Technology | — | 0.27 | 0.28 | 0.29 | 0.31 | 0.33 | |
Based on: 10-K (reporting date: 2025-07-31), 10-K (reporting date: 2024-07-31), 10-K (reporting date: 2023-07-31), 10-K (reporting date: 2022-07-31), 10-K (reporting date: 2021-07-31), 10-K (reporting date: 2020-07-31).
1 2025 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 417,400 ÷ 23,576,200 = 0.02
2 Click competitor name to see calculations.
- Total Debt (Including Operating Lease Liability)
- The total debt exhibited a decreasing trend over the period analyzed. Starting at approximately $3.48 billion in 2020, total debt increased moderately to about $4.02 billion by 2022. Subsequently, a significant reduction occurred, with debt declining to $2.33 billion in 2023, further decreasing to $1.41 billion in 2024, and reaching approximately $417 million in 2025. This trend indicates progressive deleveraging and improved debt management over time.
- Total Assets
- Total assets displayed consistent growth throughout the entire period. Beginning at around $9.07 billion in 2020, assets increased steadily each year to $10.24 billion in 2021 and $12.25 billion in 2022. Growth accelerated from 2023 onwards, with assets rising to $14.50 billion, then $19.99 billion in 2024, and reaching $23.58 billion in 2025. This substantial increase signifies ongoing investment and expansion of the asset base.
- Debt to Assets Ratio (Including Operating Lease Liability)
- The debt to assets ratio demonstrated a clear downward trajectory over the period. Starting at 0.38 in 2020, indicating that 38% of assets were financed by debt, the ratio decreased to 0.35 in 2021 and 0.33 in 2022. There was a marked decline afterward, dropping to 0.16 in 2023, followed by further reductions to 0.07 in 2024 and 0.02 in 2025. This significant improvement suggests a strengthening balance sheet with a lower reliance on debt financing relative to asset size.
Financial Leverage
Palo Alto Networks Inc., financial leverage calculation, comparison to benchmarks
| Jul 31, 2025 | Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | Jul 31, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Total assets | 23,576,200) | 19,990,900) | 14,501,100) | 12,253,600) | 10,241,600) | 9,065,400) | |
| Stockholders’ equity | 7,824,400) | 5,169,700) | 1,748,400) | 210,000) | 634,500) | 1,101,800) | |
| Solvency Ratio | |||||||
| Financial leverage1 | 3.01 | 3.87 | 8.29 | 58.35 | 16.14 | 8.23 | |
| Benchmarks | |||||||
| Financial Leverage, Competitors2 | |||||||
| Accenture PLC | — | 1.98 | 1.99 | 2.14 | 2.21 | 2.18 | |
| Adobe Inc. | — | 2.14 | 1.80 | 1.93 | 1.84 | 1.83 | |
| Cadence Design Systems Inc. | — | 1.92 | 1.67 | 1.87 | 1.60 | 1.58 | |
| CrowdStrike Holdings Inc. | 2.65 | 2.88 | 3.43 | 3.53 | 3.14 | 1.89 | |
| Datadog Inc. | — | 2.13 | 1.94 | 2.13 | 2.29 | 1.97 | |
| Fair Isaac Corp. | — | — | — | — | — | 4.85 | |
| International Business Machines Corp. | — | 5.02 | 6.00 | 5.80 | 6.98 | 7.57 | |
| Intuit Inc. | 1.88 | 1.74 | 1.61 | 1.69 | 1.57 | 2.14 | |
| Microsoft Corp. | 1.80 | 1.91 | 2.00 | 2.19 | 2.35 | 2.55 | |
| Oracle Corp. | 8.23 | 16.20 | 125.24 | — | 25.03 | 9.56 | |
| Palantir Technologies Inc. | — | 1.27 | 1.30 | 1.35 | 1.42 | 1.77 | |
| Salesforce Inc. | 1.68 | 1.67 | 1.69 | 1.64 | 1.60 | 1.63 | |
| ServiceNow Inc. | — | 2.12 | 2.28 | 2.64 | 2.92 | 3.07 | |
| Synopsys Inc. | — | 1.45 | 1.68 | 1.71 | 1.65 | 1.64 | |
| Workday Inc. | 1.99 | 2.04 | 2.41 | 2.31 | 2.66 | 2.74 | |
| Financial Leverage, Sector | |||||||
| Software & Services | — | 2.35 | 2.55 | 2.73 | 2.95 | 3.13 | |
| Financial Leverage, Industry | |||||||
| Information Technology | — | 2.46 | 2.55 | 2.69 | 2.89 | 3.12 | |
Based on: 10-K (reporting date: 2025-07-31), 10-K (reporting date: 2024-07-31), 10-K (reporting date: 2023-07-31), 10-K (reporting date: 2022-07-31), 10-K (reporting date: 2021-07-31), 10-K (reporting date: 2020-07-31).
1 2025 Calculation
Financial leverage = Total assets ÷ Stockholders’ equity
= 23,576,200 ÷ 7,824,400 = 3.01
2 Click competitor name to see calculations.
- Total assets
- The total assets show a consistent upward trend over the periods observed, increasing from approximately $9.07 billion in July 2020 to about $23.58 billion in July 2025. This indicates substantial growth in the asset base, with particularly notable jumps between 2023 and 2024, and continuing growth into 2025, reflecting expansion or increased investments.
- Stockholders’ equity
- Stockholders’ equity exhibits considerable volatility within the timeframe. It started at approximately $1.10 billion in 2020, declined to a low of $210 million by 2022, and then sharply rose to around $7.82 billion by 2025. The significant dip up to 2022 suggests a period of possible losses or share repurchases, followed by strong equity growth, likely from retained earnings or equity issuances, improving the financial stability of the company.
- Financial leverage ratio
- The financial leverage ratio fluctuates considerably, peaking at 58.35 in 2022, indicating a high level of liabilities relative to equity during that period. Before and after this peak, the ratio remains much lower, around 8.23 in 2020 and decreasing to 3.01 by 2025. The decrease towards 2025 suggests a deleveraging effort or an improvement in equity relative to debt, contributing to a more balanced capital structure over time.
Interest Coverage
Palo Alto Networks Inc., interest coverage calculation, comparison to benchmarks
| Jul 31, 2025 | Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | Jul 31, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Net income (loss) | 1,133,900) | 2,577,600) | 439,700) | (267,000) | (498,900) | (267,000) | |
| Add: Income tax expense | 461,800) | (1,589,300) | 126,600) | 59,800) | 33,900) | 35,200) | |
| Add: Interest expense | 3,000) | 8,300) | 27,200) | 27,400) | 163,300) | 88,700) | |
| Earnings before interest and tax (EBIT) | 1,598,700) | 996,600) | 593,500) | (179,800) | (301,700) | (143,100) | |
| Solvency Ratio | |||||||
| Interest coverage1 | 532.90 | 120.07 | 21.82 | -6.56 | -1.85 | -1.61 | |
| Benchmarks | |||||||
| Interest Coverage, Competitors2 | |||||||
| Accenture PLC | — | 165.48 | 193.31 | 195.34 | 131.46 | 205.84 | |
| Adobe Inc. | — | 42.01 | 61.17 | 54.64 | 51.49 | 37.00 | |
| Cadence Design Systems Inc. | — | 19.37 | 36.43 | 46.58 | 46.26 | 31.50 | |
| CrowdStrike Holdings Inc. | 3.07 | 5.77 | -5.31 | -5.34 | -55.36 | -315.25 | |
| Datadog Inc. | — | 29.85 | 10.56 | -1.30 | 0.12 | 0.27 | |
| Fair Isaac Corp. | — | 7.08 | 6.79 | 7.83 | 12.80 | 7.09 | |
| International Business Machines Corp. | — | 4.40 | 6.42 | 1.97 | 5.20 | 4.62 | |
| Intuit Inc. | 20.57 | 15.67 | 13.05 | 32.38 | 89.14 | 158.00 | |
| Microsoft Corp. | 52.84 | 37.72 | 46.38 | 41.58 | 31.31 | 21.47 | |
| Oracle Corp. | 5.01 | 4.39 | 3.65 | 3.84 | 6.28 | 7.13 | |
| Palantir Technologies Inc. | — | — | 69.33 | -87.97 | -133.20 | -82.39 | |
| Salesforce Inc. | 28.35 | 18.49 | 3.20 | 7.93 | 21.49 | 6.43 | |
| ServiceNow Inc. | — | 76.57 | 43.00 | 15.78 | 9.89 | 5.56 | |
| Synopsys Inc. | — | 44.06 | 1,106.08 | 657.96 | 240.38 | 125.16 | |
| Workday Inc. | 6.60 | 4.12 | -1.54 | 1.97 | -3.00 | -7.22 | |
| Interest Coverage, Sector | |||||||
| Software & Services | — | 17.98 | 17.21 | 18.04 | 17.29 | 13.91 | |
| Interest Coverage, Industry | |||||||
| Information Technology | — | 19.56 | 17.69 | 22.63 | 19.89 | 14.12 | |
Based on: 10-K (reporting date: 2025-07-31), 10-K (reporting date: 2024-07-31), 10-K (reporting date: 2023-07-31), 10-K (reporting date: 2022-07-31), 10-K (reporting date: 2021-07-31), 10-K (reporting date: 2020-07-31).
1 2025 Calculation
Interest coverage = EBIT ÷ Interest expense
= 1,598,700 ÷ 3,000 = 532.90
2 Click competitor name to see calculations.
The analysis of the annual financial data reveals significant variations in the earnings before interest and tax (EBIT) and interest-related figures over the reported periods.
- Earnings before interest and tax (EBIT)
- EBIT showed a negative trend in the initial years, with losses amounting to -143.1 million US$ in 2020 and further declining to -301.7 million US$ in 2021. This negative performance improved in 2022, reducing the loss to -179.8 million US$. A substantial positive turnaround occurred from 2023 onwards, with EBIT recording positive values of 593.5 million US$, then increasing to 996.6 million US$ in 2024, and further to 1.599 billion US$ in 2025. This change signals a transition from operating losses to strong profitability in recent years.
- Interest expense
- Interest expense generally decreased over the analyzed timeframe. Starting from 88.7 million US$ in 2020, it increased to its peak in 2021 at 163.3 million US$, then sharply declined to 27.4 million US$ in 2022, followed by slight decreases to 27.2 million US$ in 2023, 8.3 million US$ in 2024, and further down to 3.0 million US$ in 2025. This downward trend suggests improved debt management or reduced borrowing costs.
- Interest coverage ratio
- The interest coverage ratio, an indicator of the company's ability to meet interest obligations from operating earnings, displayed a pronounced upward trend. It was negative and declining initially, from -1.61 in 2020 to -1.85 in 2021, and further declining sharply to -6.56 in 2022, indicating insufficient earnings to cover interest expenses. However, beginning in 2023, the ratio turned positive and increased dramatically to 21.82, then to 120.07 in 2024, and reaching 532.9 in 2025. This reflects a strong improvement in operational profitability relative to interest expenses, significantly enhancing the company's financial stability.
Overall, the data illustrate a substantial recovery in operating profitability and a marked improvement in the company’s ability to cover interest expenses. The decreasing interest expense and soaring interest coverage ratio align with an enhanced financial position and potentially lower financial risk over the analyzed periods.
Fixed Charge Coverage
Palo Alto Networks Inc., fixed charge coverage calculation, comparison to benchmarks
| Jul 31, 2025 | Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | Jul 31, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Net income (loss) | 1,133,900) | 2,577,600) | 439,700) | (267,000) | (498,900) | (267,000) | |
| Add: Income tax expense | 461,800) | (1,589,300) | 126,600) | 59,800) | 33,900) | 35,200) | |
| Add: Interest expense | 3,000) | 8,300) | 27,200) | 27,400) | 163,300) | 88,700) | |
| Earnings before interest and tax (EBIT) | 1,598,700) | 996,600) | 593,500) | (179,800) | (301,700) | (143,100) | |
| Add: Operating lease costs | 88,100) | 75,600) | 64,200) | 67,600) | 59,300) | 63,500) | |
| Earnings before fixed charges and tax | 1,686,800) | 1,072,200) | 657,700) | (112,200) | (242,400) | (79,600) | |
| Interest expense | 3,000) | 8,300) | 27,200) | 27,400) | 163,300) | 88,700) | |
| Operating lease costs | 88,100) | 75,600) | 64,200) | 67,600) | 59,300) | 63,500) | |
| Fixed charges | 91,100) | 83,900) | 91,400) | 95,000) | 222,600) | 152,200) | |
| Solvency Ratio | |||||||
| Fixed charge coverage1 | 18.52 | 12.78 | 7.20 | -1.18 | -1.09 | -0.52 | |
| Benchmarks | |||||||
| Fixed Charge Coverage, Competitors2 | |||||||
| Accenture PLC | — | 13.46 | 10.98 | 12.25 | 10.41 | 9.66 | |
| Adobe Inc. | — | 26.20 | 30.56 | 26.79 | 25.59 | 18.77 | |
| Cadence Design Systems Inc. | — | 11.13 | 14.79 | 15.50 | 13.77 | 11.46 | |
| CrowdStrike Holdings Inc. | 2.25 | 3.98 | -3.39 | -3.39 | -6.40 | -12.01 | |
| Datadog Inc. | — | 5.09 | 2.47 | 0.09 | 0.55 | 0.53 | |
| Fair Isaac Corp. | — | 6.35 | 5.94 | 6.39 | 8.93 | 4.91 | |
| International Business Machines Corp. | — | 3.13 | 4.32 | 1.52 | 3.13 | 2.62 | |
| Intuit Inc. | 14.50 | 11.14 | 9.03 | 14.67 | 25.58 | 27.48 | |
| Microsoft Corp. | 16.63 | 17.61 | 19.44 | 19.50 | 16.90 | 12.44 | |
| Oracle Corp. | 3.71 | 3.55 | 3.12 | 3.22 | 5.17 | 5.68 | |
| Palantir Technologies Inc. | — | 9.48 | 4.62 | -5.06 | -7.89 | -16.41 | |
| Salesforce Inc. | 8.78 | 4.74 | 1.51 | 2.18 | 2.92 | 1.68 | |
| ServiceNow Inc. | — | 12.36 | 7.59 | 3.87 | 2.95 | 2.29 | |
| Synopsys Inc. | — | 12.88 | 14.38 | 12.91 | 9.29 | 7.46 | |
| Workday Inc. | 3.69 | 2.60 | -0.29 | 1.15 | -0.69 | -2.35 | |
| Fixed Charge Coverage, Sector | |||||||
| Software & Services | — | 9.98 | 9.46 | 9.41 | 9.20 | 7.41 | |
| Fixed Charge Coverage, Industry | |||||||
| Information Technology | — | 12.42 | 11.32 | 13.42 | 12.19 | 9.02 | |
Based on: 10-K (reporting date: 2025-07-31), 10-K (reporting date: 2024-07-31), 10-K (reporting date: 2023-07-31), 10-K (reporting date: 2022-07-31), 10-K (reporting date: 2021-07-31), 10-K (reporting date: 2020-07-31).
1 2025 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 1,686,800 ÷ 91,100 = 18.52
2 Click competitor name to see calculations.
The financial data reveals significant changes in the earnings before fixed charges and tax, fixed charges, and fixed charge coverage over the examined periods.
- Earnings before fixed charges and tax
- There is a notable transition in earnings from negative values in the earlier years to positive figures starting from the fiscal year ending July 31, 2023. Initially, the earnings were substantially negative at -79,600 thousand USD in 2020, deteriorating further to -242,400 thousand USD in 2021. A partial improvement occurred in 2022 with earnings at -112,200 thousand USD. A strong recovery is observed beginning in 2023, with earnings reaching 657,700 thousand USD, followed by continued growth to 1,072,200 thousand USD in 2024 and 1,686,800 thousand USD in 2025. This trend indicates a significant turnaround in the company's operational profitability before fixed charges and tax.
- Fixed charges
- Fixed charges peaked in 2021 at 222,600 thousand USD, which was the highest across all years presented. Subsequently, there has been a consistent decline in fixed charges, dropping to 95,000 thousand USD in 2022, and stabilizing around the 83,900 to 91,100 thousand USD range from 2023 to 2025. This reduction in fixed charges contributes positively to the improvement in earnings before fixed charges and tax.
- Fixed charge coverage ratio
- The fixed charge coverage ratio reflects the ability to cover fixed charges with earnings before fixed charges and tax. From 2020 to 2022, this ratio was negative, indicating insufficient earnings to cover fixed charges, with values deteriorating from -0.52 to -1.18. Starting in 2023, the ratio sharply improves to 7.2 and continues to increase substantially to 12.78 in 2024 and 18.52 in 2025. This marks a pronounced enhancement in financial stability and operating performance, highlighting a strong capacity to meet fixed obligations from operating earnings.
Overall, the analysis shows a clear improvement trajectory in financial performance. The company has reversed its negative earnings trend, lowered fixed charges after a peak, and demonstrated a considerable increase in its ability to cover fixed charges from earnings before interest and tax. These changes indicate enhanced operational efficiency and financial health over the reported periods.