Synopsys Inc. (NASDAQ:SNPS)

Debt to Equity and Related Ratios

Initially, the debt to equity ratio decreased steadily from 0.08 to 0.02-0.03 levels between early 2020 and late 2021. From early 2022 through early 2025, this ratio remained at zero, indicating no reported debt relative to equity, until a sharp increase occurred in mid-2025 to 1.01 and then declined slightly to 0.52. When including operating lease liabilities, the debt to equity ratio followed a similar decline from 0.21 to 0.07 between 2020 and early 2025, with a substantial spike to 1.08 followed by a decrease to 0.55 in the latter reported periods.

Debt to Capital and Related Ratios

The debt to capital ratio showed a decline from 0.07 in early 2020 down to zero in early 2022 and maintained zero through early 2025. A notable increase was observed in mid-2025, reaching 0.5 before declining to 0.34. Including operating lease liabilities, the trend was more gradual, decreasing from 0.17 to 0.07 over the same timeframe and then jumping to 0.52, followed by a reduction to 0.35.

Debt to Assets and Related Ratios

The debt to assets ratio decreased from 0.05 in early 2020 to zero by early 2022, remaining at zero until a significant increase to 0.42 in mid-2025, subsequently moderating to 0.30. Including operating leases, the ratio declined modestly from 0.12 to 0.05 over the observed period before spiking to 0.45 and reducing to 0.31 in the latest periods reported.

Financial Leverage

Financial leverage ratio demonstrated a gradual decline from 1.74 in early 2020 to 1.4 by early 2025, indicating a slowly reducing proportion of total assets financed by equity. However, post this period, leverage rose sharply to 2.4, followed by a decrease to 1.75.

Interest Coverage Ratio

Interest coverage data is largely absent until mid-2025, where a sudden appearance shows values of 15.86 and later 5.98, suggesting the company's ability to cover interest expenses significantly declined in the latest period but remained above critical danger thresholds.

Overall Trends and Insights

Between 2020 and early 2025, the company maintained very low levels of debt relative to equity, capital, and assets, indicating a strong equity position and minimal leverage. The inclusion of operating lease liabilities adjusts these ratios upward but still reflects conservative leverage. In mid-2025, a notable shift occurs with increased leverage and debt ratios, implying higher reliance on debt financing. This shift is accompanied by a decline in interest coverage ratio, which could signal increased financial risk or a change in capital structure strategy. The financial leverage trend corroborates a recent increase in financial risk after a period of deleveraging.

The analysis of the quarterly financial data reveals significant patterns in the company's financial structure over the observed periods.

Total Debt

There is a notable downward trend in total debt from January 2020 through July 2025. Initially, the total debt was recorded at 331,092 thousand US dollars and declined steadily to 14,220 thousand US dollars by July 2025, indicating a substantial reduction in debt levels over time. However, an abrupt and sharp increase occurs later, with debt escalating to over 10 billion US dollars and then over 14 billion US dollars in April and July 2025, respectively. This sudden rise marks a significant shift in the company's leverage position during the final recorded quarters.

Total Stockholders’ Equity

The stockholders' equity shows a generally consistent increase across the timeline. Starting from approximately 4.15 million thousand US dollars in January 2020, equity rises steadily, reflecting accumulated profits or retained earnings, and reaches a peak of about 9.92 million thousand US dollars by July 2025. A substantial increase is also observed in the later quarters, with the equity figure reaching over 27.6 million thousand US dollars by July 2025, which indicates considerable capital growth or infusion during this period.

Debt to Equity Ratio

Initially, the debt to equity ratio was low, indicating limited financial leverage, with values fluctuating between 0.02 and 0.08 from January 2020 to October 2021. There is a period where the ratio is effectively zero, likely corresponding to minimal or no debt relative to equity. In the last two quarters recorded (April and July 2025), the ratio sharply rises to 1.01 and 0.52, respectively, signifying a substantial increase in debt relative to equity, which suggests a shift toward higher leverage and potentially increased financial risk.

In summary, over the majority of the period, the company maintained a conservative debt structure with increasing equity, reflecting a strengthening financial position. However, the last periods show extraordinary growth in both total debt and equity, leading to a sharp rise in leverage ratios. This pattern might be indicative of significant financing activities such as new debt issuances or acquisitions, which could affect the company's future risk profile and capital structure.

The financial data reveals several notable trends in the company's debt, equity, and leverage over the analyzed periods. Total debt, including operating lease liabilities, initially decreased from early 2020 through early 2022 but then exhibited fluctuating values with a significant increase in mid-2025. Conversely, stockholders' equity demonstrated consistent growth across all periods, showing steady accumulation of shareholder value over time.

The debt to equity ratio, representing leverage, steadily declined from 0.21 in the first quarter of 2020 to a low of approximately 0.07 by early 2025, indicating a trend toward reduced reliance on debt financing relative to equity. However, this ratio sharply increased again in mid-2025, reflecting a substantial rise in debt compared to equity during that period. This abrupt change suggests a significant adjustment in the company's capital structure, potentially due to new financing or large-scale obligations incurred.

Total Debt (including operating lease liability)

The company reduced its total debt from around $858 million in January 2020 to a lower range near $580-$690 million through early 2023, demonstrating prudent management of liabilities. However, a dramatic surge in total debt occurred in 2025, jumping to over $10 billion and eventually surpassing $15 billion, pointing to considerable new borrowings or reclassification of obligations.

Total Stockholders’ Equity

Stockholders’ equity showed consistent and substantial growth, almost doubling from approximately $4.1 billion in early 2020 to over $27.6 billion by mid-2025. This steady increase indicates ongoing profitability, retained earnings accumulation, or capital infusions favoring shareholders’ claim on company assets.

Debt to Equity Ratio

The ratio steadily decreased over much of the timeline, from 0.21 to as low as 0.07, signifying improved financial stability and reduced gearing. That said, a sudden spike to 1.08 and a subsequent level at 0.55 in 2025 signals a reversal in this trend, which may warrant further investigation into the causes, such as debt refinancing, acquisitions, or other strategic investments increasing leverage substantially.

The analysis of the financial data reveals several notable trends concerning the company's leverage and capital structure over the reported periods.

Total Debt

Initially, total debt showed a significant declining trend from 331 million USD in early 2020 to just above 14 million USD by mid-2025, indicating a substantial reduction in borrowings over this timeframe. The decline was steady and consistent up until mid-2025 when there was a sudden and substantial increase, escalating rapidly to over 14 billion USD by the last reported quarter. This sharp rise marks a dramatic change in the company’s debt level toward the end of the period.

Total Capital

Total capital exhibited a progressive increase throughout the majority of the periods, growing from approximately 4.48 billion USD in early 2020 to nearly 42 billion USD by mid-2025. This growth was mostly gradual and consistent until early 2025, after which there was an accelerated increase coinciding with the rise in debt. The upward trend suggests strengthening equity and/or retained earnings contributing to the company's overall capital base.

Debt to Capital Ratio

The debt to capital ratio was relatively low and decreasing in the earlier periods, moving from 7% in early 2020 to virtually 0% from 2022 through late 2024. This indicates a conservative use of debt relative to capital for a significant span. However, toward the end of the dataset, the ratio experienced a noticeable surge, reaching 50% and then adjusting down to 34% in the last two quarters. This jump corresponds with the sharp increase in total debt and total capital, reflecting a change in the capital structure with increased leverage.

Overall, the financial data show a company that maintained low leverage for most of the reported years, steadily increasing its capital base while reducing debt levels. This conservative financial policy changed abruptly in early 2025 when both debt and capital grew significantly, resulting in a higher leverage ratio. The implications of this shift could involve strategic financing decisions or major investments, which warrant further investigation to understand the underlying drivers and potential risks associated with the increased indebtedness.

The financial data indicates notable trends in the company's debt and capital structure over the examined periods.

Total Debt (Including Operating Lease Liability)

The total debt shows a general decline from early 2020 through early 2025, decreasing from approximately 858.5 million USD to around 665 million USD by mid-2025. Despite this general downward trend, there are fluctuations around 2022 and 2023 where the debt levels briefly increase and then stabilize. However, in the last two reported quarters, there is a sharp and significant increase in total debt, reaching over 15 billion USD by mid-2025, which represents a substantial shift compared to prior periods.

Total Capital (Including Operating Lease Liability)

Total capital displays a steady upward trajectory throughout the periods, rising from about 5.01 billion USD in early 2020 to nearly 10 billion USD by mid-2025. This increase is consistent with gradual growth in capital base until the final two quarters, where a dramatic surge occurs, pushing total capital to over 42 billion USD. This sharp increase mirrors the spike in total debt, indicating a major event or restructuring impacting the capital structure.

Debt to Capital Ratio (Including Operating Lease Liability)

The debt to capital ratio steadily decreases over most of the timeline, dropping from 0.17 in early 2020 to as low as 0.07 by early 2025, suggesting improved leverage and a stronger capital base relative to debt. However, a pronounced reversal appears in the final two quarters, where the ratio jumps sharply to 0.52 and then falls back to 0.35, indicating heightened leverage and a shift towards greater reliance on debt financing during this period.

In summary, the company maintains a generally conservative leverage position with a declining debt to capital ratio for the majority of the observed intervals. Both total debt and total capital have grown moderately, reflecting steady financial management. The substantial increase in both debt and capital and the spike in the leverage ratio in the last two quarters suggest a significant financial transaction or repositioning that markedly altered the capital structure, warranting further investigation to understand its nature and implications.

The analysis of the financial data over the examined periods reveals several notable trends regarding the company's debt profile, asset base, and leverage ratios.

Total Debt

Total debt exhibits a general downward trend from the start of the period, decreasing substantially from approximately 331 million USD in early 2020 to around 14 million USD by mid-2025. However, there is an abrupt and significant spike in total debt starting in early 2025, with values surging to over 10 billion USD and further increasing to approximately 14.3 billion USD by mid-2025. This reversal marks a distinct departure from the prior pattern of declining debt.

Total Assets

Total assets demonstrate a consistent and steady upward progression throughout the entire period. Beginning at about 7.2 billion USD in early 2020, total assets rise gradually across each quarter, reaching nearly 13.1 billion USD by early 2025. Following this point, total assets experience a pronounced increase, nearly doubling to approximately 23.8 billion USD by mid-2025 and surging further to 48.2 billion USD by the end of the observed quarter. This substantial asset growth in the latest quarters coincides with the spike in total debt.

Debt to Assets Ratio

The debt to assets ratio remains relatively low and diminishes slightly over the initial period, declining from 0.05 in early 2020 to near zero throughout late 2021 to early 2025, indicating minimal leverage and a conservative debt position relative to assets during this timeframe. However, in early 2025, this ratio increases sharply to 0.42 and then decreases somewhat to 0.3 by mid-2025. The surge in this ratio aligns with the sizeable increase in total debt and assets observed in the same periods, reflecting a notably higher leverage level.

In summary, the company maintained a low debt burden relative to assets for several years, with steadily growing assets and decreasing debt. The sudden, substantial increases in both debt and assets in early 2025, along with the corresponding rise in leverage ratio, suggest a significant financial event or strategic shift has occurred, resulting in elevated borrowing and asset accumulation. This change marks a departure from the prior conservative financial stance and may warrant further investigation to understand the underlying causes and potential implications.

The analysis of the financial data reveals several notable trends over the observed periods. Total debt, including operating lease liability, demonstrates a general decline from early 2020 through early 2025, starting at approximately $858.5 million and decreasing to levels below $700 million for numerous consecutive quarters. However, a sharp and substantial increase is observed during the last two reported periods, surging to over $10.7 billion and further exceeding $15.1 billion, indicating a significant change in debt structure or financing activities.

Total assets show a consistent upward trajectory throughout the periods analyzed. Beginning at roughly $7.2 billion in early 2020, assets steadily rise quarter over quarter, reaching over $13 billion by early 2025. In the final two periods, a dramatic increase occurs, with total assets more than doubling from approximately $23.8 billion to over $48.2 billion, which suggests large acquisitions, asset revaluations, or other substantial changes in the asset base.

The debt to assets ratio, which measures the proportion of total debt relative to total assets, exhibits a declining trend from 0.12 in the first quarter of 2020 down to 0.05 by early 2025, reflecting a strengthening balance sheet with comparatively less leverage. Contrastingly, this ratio then spikes sharply in the last two periods to 0.45 and 0.31 respectively, highlighting increased leverage consistent with the observed jump in total debt and assets.

Overall, the data indicates a period of steady deleveraging and asset growth from 2020 to early 2025, followed by a marked shift with substantial increases in both debt and assets, resulting in heightened leverage. This abrupt change suggests strategic financial maneuvers, possibly linked to significant corporate transactions or restructuring activities.

Total Debt

Gradual decline from $858.5M to below $700M over most quarters, then a sharp increase to over $15B in the final periods.

Total Assets

Steady increase from $7.2B to over $13B, followed by a substantial surge to $48.2B near the end.

Debt to Assets Ratio

Declined steadily from 0.12 to 0.05, then abruptly rose to 0.45 and 0.31 in the last two periods.

The analysis of the financial data reveals notable trends in the company's total assets, stockholders’ equity, and financial leverage over the examined periods.

Total Assets

Total assets exhibit a general upward trajectory across the time span, beginning at approximately $7.2 billion and reaching a significant peak of $48.2 billion by the latest period. The growth is steady with moderate increases in most quarters, particularly from early 2020 through early 2025. A pronounced surge occurs between the third quarter of 2025, where assets leap from around $13 billion to over $23 billion, and continue climbing finalizing near $48 billion. This sharp rise likely indicates substantial asset acquisitions or other balance sheet expansions.

Total Stockholders’ Equity

Stockholders’ equity demonstrates a consistent increase over the periods, starting at approximately $4.1 billion and gradually rising to around $9 billion by early 2025. Similar to total assets, equity grows steadily with mild quarter-over-quarter gains. A marked increase is evident at the final data point, with equity nearly tripling to about $27.6 billion, aligning with the significant asset increase. This suggests equity financing or retained earnings contributions supporting the expansion in assets.

Financial Leverage

The financial leverage ratio shows a downward trend from 1.74 initially to around 1.40 by early 2025, reflecting a modest reduction in leverage over time. However, an abrupt change occurs in the third quarter of 2025 when the ratio spikes sharply to 2.40, before decreasing again to 1.75. These fluctuations imply varying use of debt relative to equity, possibly connected to the rapid asset expansion noted in the same timeframe. The lower leverage in earlier periods suggests a conservative capital structure, while the spike may be due to short-term borrowing or increased liabilities.

In summary, the company experienced solid asset and equity growth with a conservative leverage approach for most of the examined periods. The later quarters show dramatic changes in scale and leverage, indicative of significant financial restructuring or transactions influencing the balance sheet composition substantially.

Earnings before interest and tax (EBIT)

The EBIT values demonstrate notable volatility across the analyzed periods. Starting from around 99.6 million USD in early 2020, there was a significant increase peaking near 327.2 million by January 2022. Following this peak, fluctuations are evident, with EBIT oscillating between approximately 212 million and 457 million USD through late 2023 and early 2024. Notably, the highest recorded EBIT appears in October 2023 at approximately 409.7 million USD, followed by a peak of 457.5 million USD in January 2024. However, by mid-2025, EBIT declines to about 335.8 million USD, indicating a potential downward shift or increased volatility in recent quarters.

Interest Expense

Interest expense data was only reported in the last two quarters of the dataset, revealing substantially high values. Interest expense amounts were approximately 94.3 million USD and 146.5 million USD in the last two recorded quarters. The sudden appearance and magnitude of interest expenses in this late period suggest an increase in financing costs or new debt obligations undertaken by the entity toward the end of the analyzed timeframe.

Interest Coverage Ratio

The interest coverage ratio, available only for the final two quarters, shows a decrease from 15.86 to 5.98. Though the ratio remains above the critical threshold of 1, this reduction indicates diminished ability to cover interest expenses with operating earnings. This trend aligns with the observed rising interest expenses and highlights a potential pressure area regarding debt servicing capacity.

Overall Financial Trends

The company’s operating profitability (measured via EBIT) exhibited significant growth initially, reaching strong peaks in early 2022 and late 2023. However, subsequent quarters display increased variability and a downturn in EBIT towards mid-2025. Concurrently, the emergence and sharp increase of interest expenses impose higher financial burdens, as evidenced by the declining interest coverage ratio in the final quarters reported. This dynamic suggests rising financing costs coupled with potentially moderated operating performance, which could impact future financial stability if the trends persist.