Accenture PLC (NYSE:ACN)

The analysis of the financial ratios over the reported periods reveals several key trends in the company's capital structure and its capacity to meet financial obligations.

Debt Ratios

There is a noticeable increase in traditional debt metrics such as debt to equity, debt to capital, and debt to assets starting from zero or near zero values in earlier years. The debt to equity ratio rises gradually from 0 in 2020 through 0.17 in 2025, indicating a growing reliance on debt financing relative to shareholders' equity. When operating lease liabilities are included, the respective ratios show a decreasing trend from 2020 to 2023 but then reverse, increasing notably by 2025, suggesting changes in lease or financing policies.

Specifically, debt to equity including operating lease liability declines from 0.21 in 2020 to 0.12 by 2023, followed by a rise to 0.26 in 2025. This pattern may reflect shifts in obligations or capital management strategies impacting the reported liabilities. Similarly, debt to capital and debt to assets ratios including operating lease liabilities follow a comparable pattern, signifying consistent adjustments in lease-related financial commitments over time.

Financial Leverage

Financial leverage remains fairly stable across the years, fluctuating slightly between 1.98 and 2.21 without extreme variations. The slight decline up to 2023 reflects a modest reduction in leverage, but an uptick by 2025 suggests a return to higher leverage levels, possibly coinciding with the increased debt ratios observed.

Interest and Fixed Charge Coverage

The company's interest coverage ratio, a key measure of the ability to service interest expenses, exhibits a declining trend over the period. From an exceptionally high coverage of 205.84 in 2020, it falls to 45.94 in 2025. Although still indicating strong capacity to cover interest expenses, the substantial decrease points to increasing interest obligations or reduced operating earnings relative to interest expense.

Fixed charge coverage improves modestly overall, with fluctuations between 9.66 and 13.46, peaking in 2024 before a slight decline in 2025. This implies that despite growing debt, the company maintains a robust ability to meet fixed financial charges including leases and other commitments, albeit with some variability.

In summary, the company is gradually increasing its leverage and debt levels, including obligations associated with operating leases. While its ability to meet fixed charges remains strong, the declining interest coverage ratio suggests tighter interest expense coverage, highlighting the need to monitor earnings relative to debt service costs. The evolving lease liabilities component emphasizes the importance of considering off-balance-sheet obligations in assessing financial risk.

Total Debt

The total debt exhibited a relatively stable trend from 2020 to 2022, with values remaining within a narrow range. However, starting in 2023, there was a pronounced increase, reaching over 1 billion USD by 2024 and further accelerating to more than 5 billion USD by 2025. This significant rise indicates a strategic or operational shift involving increased leverage in the most recent years.

Total Shareholders’ Equity

Shareholders' equity consistently increased each year throughout the observed period. Beginning at approximately 17 billion USD in 2020, equity rose steadily, nearing 31.2 billion USD by 2025. This upward trend suggests sustained profitability or capital injections, contributing to enhanced financial strength and retained earnings accumulation over time.

Debt to Equity Ratio

The debt to equity ratio remained minimal and stable—from essentially negligible levels up to 2022—indicating a low reliance on debt for financing. Starting in 2023, this ratio began to rise, moving from 0.01 to 0.17 by 2025. Despite the rise, the ratio remains relatively low in absolute terms, reflecting that equity growth has outpaced the accumulation of debt, although the shift suggests a growing use of leverage.

Summary of Financial Trends

Overall, the data reflects a dual narrative: sustained growth in equity alongside a marked increase in debt levels in the latter years. While equity expansion highlights ongoing financial robustness, the sharp rise in debt signals an increased willingness to employ leverage potentially for expansion, investments, or capital projects. The growth in the debt to equity ratio, although modest relative to conventional benchmarks, warrants monitoring to assess the impact on financial risk going forward.

The financial data over the period from August 31, 2020, to August 31, 2025, reflects varying trends in the company's total debt and shareholders' equity, as well as changes in the debt to equity ratio.

Total Debt (including operating lease liability)

Total debt remained relatively stable from 2020 through 2023, with a slight decrease from approximately 3.49 billion to 3.15 billion US dollars. However, in the following two years, there was a marked increase in total debt, reaching over 8.18 billion US dollars by 2025. This suggests significant borrowing or lease obligation increases in the most recent years under review.

Total Shareholders’ Equity

Shareholders' equity demonstrated consistent growth throughout the entire period. Starting at approximately 17 billion US dollars in 2020, it increased steadily each year, culminating in nearly 31.2 billion US dollars by 2025. This trend indicates accumulated profits, retained earnings, or possibly equity financing contributing positively to the company’s net worth.

Debt to Equity Ratio (including operating lease liability)

The debt to equity ratio showed a declining trend from 0.21 in 2020 to a low of 0.12 in 2023, indicating a strengthening equity base relative to debt. However, the ratio rose again to 0.26 by 2025, reflecting the sharp increase in debt levels relative to equity during the last two years. This suggests a shift toward higher leverage, potentially increasing financial risk depending on the context of the additional borrowing.

Overall, the company demonstrated strong equity growth with initially stable or declining leverage, followed by increased indebtedness in the later periods. The rising debt to equity ratio in the final years warrants attention to the balance between debt financing and equity strength going forward.

The analysis of the financial data over the indicated periods reveals notable trends in the company's debt and capital structure.

Total Debt

The total debt remained relatively stable from 2020 through 2022, with amounts ranging between approximately $55,000 and $65,000 thousand. A significant increase occurred in 2023, where total debt rose sharply to about $148,000 thousand, followed by an even more substantial escalation in 2024 and 2025, reaching over $1 billion and exceeding $5 billion, respectively. This indicates a rapid and considerable increase in the company’s liabilities during the latter periods.

Total Capital

Total capital showed a continuous upward trajectory throughout the years under review. Starting from approximately $17 billion in 2020, it progressively increased each year, reaching nearly $26 billion by 2023, and continuing to grow to over $36 billion by 2025. This steady growth reflects an expanding capital base, potentially driven by reinvested earnings or new capital inflows.

Debt to Capital Ratio

The debt-to-capital ratio remained very low and nearly constant from 2020 through 2022, indicating a minimal reliance on debt financing relative to the company’s total capital. Beginning in 2023, the ratio increased modestly to 0.01, then rose to 0.03 in 2024, and surged significantly to 0.14 in 2025. This pattern suggests a strategic shift towards greater leverage over time, with debt constituting a more considerable portion of the company’s capital structure by the most recent period.

Overall, the data illustrates a company transitioning from very low debt levels to a considerably more leveraged position, while simultaneously expanding its total capital. The sharp increases in total debt and the debt-to-capital ratio in the final two years warrant closer scrutiny, as they may impact the company’s financial risk profile and capital cost in the future.

The analysis of the financial ratios and figures over the observed periods reveals several key trends in the company's capital and debt structure.

Total Debt (Including Operating Lease Liability)

The total debt showed a relatively stable pattern from August 2020 through August 2023, with a slight overall decrease from approximately 3.49 billion to 3.15 billion US dollars. However, from August 2023 onwards, there is a significant uptick, with total debt increasing sharply, nearly doubling by August 2025 to approximately 8.18 billion US dollars. This marked increase suggests a strategic shift that may include increased borrowing or lease liabilities.

Total Capital (Including Operating Lease Liability)

Total capital has shown a consistent upward trend throughout the analyzed periods. Beginning at around 20.49 billion US dollars in August 2020, it steadily increased each year, reaching nearly 39.38 billion US dollars by August 2025. This upward trajectory indicates ongoing capital growth, which could be driven by retained earnings, equity injections, or a combination of these factors.

Debt to Capital Ratio (Including Operating Lease Liability)

The debt to capital ratio initially declined from 0.17 in August 2020 to a low of 0.11 by August 2023, illustrating an improvement in the company's leverage position and potentially a more conservative financing strategy. However, from August 2023 onward, this ratio rises again, reaching 0.21 by August 2025. This increase corresponds with the rise in total debt and indicates a higher reliance on debt financing relative to capital.

Overall, the data indicates a company that maintained a prudent balance between debt and capital up to 2023, followed by a period of substantial borrowing or lease commitment increases. This shift is reflected in the rising debt to capital ratio, suggesting a possible change in financial strategy or response to external factors. The consistent growth in total capital provides a strong base, but the increased leverage from 2023 onward may imply elevated financial risk and should be monitored closely.

The analysis of the financial data over the six-year period reveals several significant trends related to the company's debt levels, asset base, and leverage ratios.

Total Debt

Total debt exhibited a fluctuating yet generally increasing trend. Starting at approximately $61.9 million, it rose slightly to about $65.6 million in the following year. It then decreased to roughly $55.1 million but experienced a sharp increase thereafter, reaching nearly $148 million by 2023. The most notable changes occurred in 2024 and 2025, with total debt soaring to over $1 billion and then exceeding $5.1 billion, indicating substantial capital inflow through borrowing or debt issuance during these years.

Total Assets

Total assets demonstrated consistent growth throughout the period. From an initial figure of approximately $37.1 billion, assets increased steadily each year, culminating in nearly $65.4 billion by 2025. This steady expansion suggests ongoing investment and asset accumulation, supporting operational and strategic growth activities.

Debt to Assets Ratio

The debt to assets ratio remained negligible and effectively 0 for the first four years, signaling very low leverage relative to the asset base. However, starting in 2024, the ratio rose to 0.02 and further escalated to 0.08 in 2025. While still comparatively low in absolute terms, this increase reflects the sharp rise in total debt outpacing asset growth, implying that the company is adopting a higher leverage stance in recent years.

Overall, the financial data indicates a strategy shift characterized by amplified borrowing against a backdrop of steady asset growth. The substantial increase in total debt in 2024 and 2025, alongside a moderate rise in leverage ratio, may reflect financing for expansion, acquisitions, or other investment initiatives. The company's balance sheet shows strong asset growth, but increasing leverage warrants careful monitoring to ensure that debt levels remain manageable relative to asset value and future earnings potential.

The financial data reveals several notable trends over the examined periods. There is a gradual increase in total assets, indicating consistent growth in the company's asset base. Conversely, total debt values exhibit a fluctuating pattern with a slight decline initially, followed by a significant increase in the latest periods.

Total debt (including operating lease liability)

The total debt demonstrates a moderate decrease from 2020 through 2023, moving from approximately 3.49 billion to around 3.15 billion US dollars. However, a substantial increase occurs starting in 2024, where debt rises sharply to over 8.18 billion by 2025, suggesting increased leverage or new obligations.

Total assets

Total assets have grown steadily across all periods, rising from roughly 37.08 billion US dollars in 2020 to nearly 65.39 billion US dollars in 2025. This consistent upward trajectory points to ongoing investment, expansion, or asset accumulation efforts.

Debt to assets ratio (including operating lease liability)

The debt to assets ratio declines from 0.09 in 2020 to a low of 0.06 in 2023, indicating improved asset coverage relative to debt during this time. However, a notable reversal takes place afterward, with the ratio rising to 0.13 by 2025, reflecting the sharp increase in debt compared to assets.

Overall, the data suggests that while the company has grown its asset base consistently, recent years have seen a marked increase in indebtedness, leading to a higher leverage position. This change could imply strategic borrowing or financing decisions that warrant further examination concerning liquidity, risk exposure, and capital structure strategy.

Total assets

The total assets show a consistent upward trajectory across the periods, increasing from approximately 37.1 billion US dollars in 2020 to nearly 65.4 billion US dollars projected for 2025. This steady growth indicates ongoing asset accumulation, reflecting possible business expansion and investment activities.

Total Accenture plc shareholders’ equity

Shareholders' equity also demonstrates a continuous increase from about 17 billion US dollars in 2020 to an estimated 31.2 billion US dollars in 2025. The rising equity suggests that the company is retaining earnings or raising capital, strengthening its financial foundation and supporting its asset growth.

Financial leverage

The financial leverage ratio initially remains around 2.18 to 2.21 in 2020 and 2021, then declines to below 2.0 in 2023 and 2024, before slightly rising to 2.1 in 2025. This indicates a trend towards modestly reducing reliance on debt relative to equity in the earlier years, followed by a slight increase in leverage in the latest period, which may reflect strategic adjustments in the company’s capital structure.

Earnings before interest and tax (EBIT)

The EBIT demonstrates a generally increasing trend over the analyzed periods. Starting from approximately 6.81 billion in 2020, EBIT increased steadily to a peak of about 9.24 billion in 2022, followed by a slight decline in 2023. The upward movement resumed in 2024 and continued into 2025, reaching nearly 10.5 billion. This pattern indicates a strong operational performance with consistent growth in earnings prior to interest and tax expenses.

Interest expense

The interest expense shows notable fluctuations across the periods. From a relatively low base of 33 million in 2020, it increased sharply to almost 59.5 million in 2021, decreased to around 47 million in 2022 and remained relatively stable in 2023. However, a significant rise is observed again in 2024 and especially in 2025, where interest expense surged to over 228 million. This increase may imply higher borrowing costs or increased debt levels in the later years.

Interest coverage ratio

The interest coverage ratio suggests how comfortably EBIT covers interest expenses. Initially, the ratio was very high at 205.84 in 2020, indicating strong earnings relative to interest costs. While the ratio decreased in the following year, it rebounded to nearly 195 in 2022 and maintained a high level around 165 by 2024, reflecting continued robust coverage. A notable decline occurs in 2025, where the ratio drops sharply to 45.94, signaling a relative tightening of interest expense coverage, likely driven by the significant increase in interest costs rather than a decrease in earnings.

Summary

Overall, the company exhibits steady growth in EBIT over the period, underscoring strong core profitability. Interest expenses have increased substantially in recent years, particularly in 2024 and 2025, contributing to a marked decline in the interest coverage ratio by 2025. Although EBIT growth buffers against rising interest expenses to some extent, the decreasing interest coverage ratio suggests increasing financial leverage or rising cost of debt that may warrant closer monitoring in future periods.

Earnings before fixed charges and tax

The earnings before fixed charges and tax exhibit a consistent upward trend over the observed periods. Starting from approximately $7.56 billion in 2020, there is a noticeable increase each year, reaching around $11.23 billion by 2025. The growth appears steady with a slight deceleration between 2022 and 2023, but overall the figures indicate expanding operational profitability before accounting for fixed financial obligations.

Fixed charges

Fixed charges display more fluctuation over the given timeframe. The amount rises from about $782 million in 2020, peaking around $916 million in 2023, then declining somewhat in 2024 to approximately $778 million, before increasing again to roughly $958 million by 2025. This variability suggests changes in interest expense or other fixed financial commitments, which may be impacted by evolving capital structure or financing costs.

Fixed charge coverage ratio

The fixed charge coverage ratio, which measures the company's ability to cover fixed financial obligations from earnings, shows a generally positive pattern. Initially, it improves from 9.66 in 2020 to 12.25 in 2022, indicating strengthened capacity to meet fixed charges. There is a slight decrease to 10.98 in 2023, followed by an increase to a peak of 13.46 in 2024, before settling at 11.72 in 2025. These fluctuations highlight some variability in coverage but overall maintain a comfortable level above 9, reflecting robust financial health with regard to fixed charge obligations.