Advance Auto Parts Inc (AAP)
Solvency ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Oct 7, 2023 | Sep 30, 2023 | Jul 15, 2023 | Jun 30, 2023 | Apr 22, 2023 | Mar 31, 2023 | Dec 31, 2022 | Oct 8, 2022 | Sep 30, 2022 | Jun 30, 2022 | Apr 23, 2022 | Mar 31, 2022 | Dec 31, 2021 | Oct 9, 2021 | Sep 30, 2021 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.12 | 0.00 | 0.14 | 0.00 | 0.15 | 0.00 | 0.00 | 0.08 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.09 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.37 | 0.00 | 0.39 | 0.00 | 0.41 | 0.00 | 0.00 | 0.27 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.26 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.59 | 0.00 | 0.65 | 0.00 | 0.70 | 0.00 | 0.00 | 0.37 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.35 | 0.00 |
| Financial leverage ratio | 4.98 | 4.80 | 4.71 | 4.76 | 5.16 | 4.77 | 4.63 | 4.65 | 4.52 | 4.75 | 4.62 | 4.61 | 4.46 | 4.47 | 4.34 | 4.13 | 4.13 | 3.90 | 3.71 | 3.71 |
The solvency ratios of Advance Auto Parts Inc indicate a strong financial position in relation to its debt obligations. The Debt-to-assets ratio remained consistently low at 0.00 throughout the period, suggesting that the company's total debt relative to its total assets was minimal.
The Debt-to-capital ratio fluctuated slightly, with peaks of 0.27 in October 8, 2022, and 0.41 in April 22, 2023, but generally stayed low and ended at 0.00 by December 31, 2024. This indicates that the company's debt as a proportion of its total capital was well-managed and decreased over time.
Similarly, the Debt-to-equity ratio was well-controlled, with occasional spikes such as 0.70 in April 22, 2023, but overall remained low and ended at 0.00 by December 31, 2024. This suggests that Advance Auto Parts Inc relied more on equity financing rather than debt financing to support its operations.
The Financial leverage ratio started at 3.71 on September 30, 2021, and gradually increased to 4.98 by December 31, 2024. This upward trend indicates a slight increase in financial leverage over time, but the ratio remained at a reasonable level, reflecting a balanced capital structure with manageable levels of debt.
Overall, based on the solvency ratios analyzed, Advance Auto Parts Inc appears to have a solid financial foundation with prudent debt management practices and a conservative approach to capital structure, which enhances its ability to meet its financial obligations effectively.
Coverage ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Oct 7, 2023 | Sep 30, 2023 | Jul 15, 2023 | Jun 30, 2023 | Apr 22, 2023 | Mar 31, 2023 | Dec 31, 2022 | Oct 8, 2022 | Sep 30, 2022 | Jun 30, 2022 | Apr 23, 2022 | Mar 31, 2022 | Dec 31, 2021 | Oct 9, 2021 | Sep 30, 2021 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | -7.85 | 1.49 | 0.90 | -0.64 | -0.07 | 3.03 | 8.19 | 9.18 | 7.13 | 8.83 | 8.07 | 13.09 | 20.93 | 21.35 | 21.35 | 23.92 | 19.45 | 30.31 | 37.33 | 57.67 |
The interest coverage ratio for Advance Auto Parts Inc has shown a significant decline over the period from September 30, 2021, to December 31, 2024. The ratio, which measures the company's ability to cover its interest expenses with operating income, started at a healthy level of 57.67 in September 2021.
However, the ratio gradually decreased over time, indicating potential financial stress for the company in meeting its interest payments. By December 31, 2024, the interest coverage ratio had fallen into negative territory, reaching -7.85. This suggests that the company's operating income was insufficient to cover its interest expenses during this period.
The declining trend in the interest coverage ratio raises concerns about Advance Auto Parts Inc's ability to manage its debt obligations effectively. Investors and creditors may view this trend negatively, as it indicates a higher risk of default on interest payments. Management should consider strategies to improve the company's profitability and operating efficiency to enhance its ability to cover interest costs in the future.