American Eagle Outfitters Inc (AEO)

American Eagle Outfitters Inc has consistently maintained a low level of debt in relation to its assets, as indicated by the debt-to-assets ratio of 0.00 for the past several years. This implies that the company relies less on debt financing to fund its operations and has a strong asset base.

In terms of the debt-to-capital ratio, American Eagle Outfitters Inc has gradually decreased its reliance on debt funding, with the ratio decreasing from 0.23 in 2021 to 0.01 in 2023. This indicates that the company is using more of its capital rather than debt to support its operations and investments.

The debt-to-equity ratio for the company has also shown a declining trend over the years, falling from 0.30 in 2021 to 0.01 in 2023. This demonstrates that American Eagle Outfitters Inc has been reducing its financial leverage and relying more on equity financing, which could signify a more stable financial position.

Furthermore, the financial leverage ratio has decreased over the years, indicating that the company's reliance on debt to support its operations has been decreasing. The ratio decreased from 3.16 in 2021 to 2.14 in 2023, demonstrating an improvement in the company's ability to meet its financial obligations and potentially reducing its financial risk.

Overall, American Eagle Outfitters Inc's solvency ratios suggest that the company has a strong financial position with low debt levels and improving leverage ratios, indicating a reduced risk of financial distress and a solid foundation for future growth.

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Coverage ratios

The interest coverage ratio for American Eagle Outfitters Inc has shown significant fluctuations over the past five years. In the most recent fiscal year ending on February 3, 2024, the interest coverage ratio improved significantly to 188.74, indicating that the company's ability to cover its interest expenses with operating profits has strengthened considerably. This is a positive sign as it suggests that American Eagle Outfitters has generated ample operating income to service its interest obligations.

However, in the previous fiscal year ending on January 28, 2023, the interest coverage ratio was substantially lower at 3.13, indicating a potential strain on the company's ability to meet its interest payments from its operating earnings. The significant increase in the interest coverage ratio in 2024 compared to 2023 is a notable improvement and suggests a more stable financial position for the company.

Looking further back, in the fiscal year ending on January 29, 2022, the interest coverage ratio stood at 17.07, which was a positive sign of the company's ability to cover its interest expenses comfortably. However, in the fiscal year ending on January 30, 2021, the interest coverage ratio was negative at -11.03, indicating that American Eagle Outfitters had insufficient operating income to cover its interest expenses during that period.

In the fiscal year ending on February 1, 2020, the interest coverage ratio was 1.57, which suggests that the company's ability to cover its interest expenses was relatively low compared to the most recent fiscal year.

Overall, the improving trend in the interest coverage ratio for American Eagle Outfitters Inc in recent years indicates a healthier financial position and better ability to meet its interest obligations from operating earnings. However, the company should continue to monitor and maintain a strong interest coverage ratio to ensure financial stability and sustainable operations in the future.