Best Buy Co. Inc (BBY)
Solvency ratios
| Feb 1, 2025 | Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.08 | 0.08 | 0.07 | 0.07 | 0.07 |
| Debt-to-capital ratio | 0.29 | 0.27 | 0.29 | 0.29 | 0.21 |
| Debt-to-equity ratio | 0.41 | 0.38 | 0.42 | 0.40 | 0.27 |
| Financial leverage ratio | 5.26 | 4.90 | 5.65 | 5.80 | 4.16 |
Based on the provided data for Best Buy Co. Inc, we can analyze the solvency ratios as follows:
1. Debt-to-assets ratio:
- The debt-to-assets ratio remained consistent at 0.07 from January 30, 2021, to January 28, 2023, and then slightly increased to 0.08 by February 3, 2024, and February 1, 2025. This indicates that only a small portion of the company's assets were financed by debt.
2. Debt-to-capital ratio:
- The debt-to-capital ratio increased from 0.21 on January 30, 2021, to 0.29 by January 29, 2022, and stayed relatively stable around 0.29 until February 1, 2025. This suggests that the company's capital structure became more leveraged over time.
3. Debt-to-equity ratio:
- The debt-to-equity ratio rose consistently from 0.27 on January 30, 2021, to 0.41 by February 1, 2025. This signifies a greater reliance on debt financing relative to equity, indicating higher financial risk.
4. Financial leverage ratio:
- The financial leverage ratio increased significantly from 4.16 on January 30, 2021, to 5.26 by February 1, 2025. This indicates that the company's reliance on debt to finance its operations and investments has been growing, which in turn may increase financial risks and interest obligations.
In summary, Best Buy Co. Inc's solvency ratios suggest a shift towards a more leveraged capital structure over the analyzed period, with increasing reliance on debt financing relative to assets, capital, and equity. This trend indicates a higher level of financial risk associated with the company's capital and debt management strategies.
Coverage ratios
| Feb 1, 2025 | Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | |
|---|---|---|---|---|---|
| Interest coverage | 26.47 | 32.19 | 52.11 | 122.12 | 46.71 |
Best Buy Co. Inc's interest coverage ratio, a measure of the company's ability to meet its interest obligations, has shown fluctuating values over the past five years. As of February 1, 2025, the interest coverage ratio stands at 26.47, indicating the company generated 26.47 times the amount needed to cover its interest expenses. This represents a decrease from the previous year's figure of 32.19, suggesting a potential decrease in the company's ability to cover interest expenses.
Notably, the interest coverage ratio peaked at 122.12 on January 29, 2022, reflecting a strong ability to meet interest payments. However, it subsequently decreased to 52.11 on January 28, 2023, before further declining to the current level. This variability in the interest coverage ratio may indicate fluctuations in Best Buy's profitability, cash flow, or debt level over the years.
Overall, while the current interest coverage ratio of 26.47 indicates the company's ability to meet its interest obligations, investors and creditors may want to monitor future trends in this ratio to assess Best Buy's financial stability and debt servicing capacity.