American Eagle Outfitters Inc (AEO)

Financial leverage ratio

		Feb 3, 2024	Oct 28, 2023	Jul 29, 2023	Apr 29, 2023	Jan 28, 2023	Oct 29, 2022	Jul 30, 2022	Apr 30, 2022	Jan 29, 2022	Oct 30, 2021	Jul 31, 2021	Jan 30, 2021	Oct 31, 2020	Aug 1, 2020	May 2, 2020	Feb 1, 2020	Nov 2, 2019	Aug 3, 2019	May 4, 2019	Feb 2, 2019
Total assets	US$ in thousands	3,557,910	3,520,790	3,431,910	3,373,890	3,420,960	3,672,480	3,629,220	3,701,520	3,786,640	3,750,020	3,495,020	3,434,810	3,498,220	3,627,980	3,630,110	3,328,680	3,452,250	3,359,160	3,255,350	1,903,380
Total stockholders’ equity	US$ in thousands	1,736,760	1,738,290	1,673,000	1,619,020	1,599,160	1,462,530	1,372,920	1,383,010	1,423,670	1,396,700	1,275,530	1,086,660	1,068,200	997,900	996,983	1,247,850	1,260,380	1,228,580	1,241,750	1,287,560
Financial leverage ratio		2.05	2.03	2.05	2.08	2.14	2.51	2.64	2.68	2.66	2.68	2.74	3.16	3.27	3.64	3.64	2.67	2.74	2.73	2.62	1.48

February 3, 2024 calculation

Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $3,557,910K ÷ $1,736,760K
= 2.05

The financial leverage ratio of American Eagle Outfitters Inc has shown some fluctuations over the past few years. The ratio indicates the extent to which the company relies on debt financing rather than equity to fund its operations and growth.

From the data provided, we can observe that the financial leverage ratio has generally been increasing from 2019 to the first half of 2023, peaking at 3.64 in both periods. This suggests that American Eagle Outfitters has been increasingly relying on debt to finance its operations and investments during this period.

However, in the most recent period, the financial leverage ratio has decreased to 2.05, which may indicate a reduction in the company's use of debt financing relative to equity. It is important to note that a lower leverage ratio can be a positive sign as it indicates a lower risk of financial distress due to high debt levels.

Overall, the trend in American Eagle Outfitters' financial leverage ratio suggests that the company has been actively managing its capital structure and possibly shifting towards a more conservative debt strategy in recent periods. This could reflect the company's efforts to balance its financial risk and optimize its capital structure for long-term sustainability.