Best Buy Co. Inc (BBY)
Financial leverage ratio
| Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 14,967,000 | 15,803,000 | 17,504,000 | 19,067,000 | 15,591,000 |
| Total stockholders’ equity | US$ in thousands | 3,053,000 | 2,795,000 | 3,020,000 | 4,587,000 | 3,479,000 |
| Financial leverage ratio | 4.90 | 5.65 | 5.80 | 4.16 | 4.48 |
February 3, 2024 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $14,967,000K ÷ $3,053,000K
= 4.90
The financial leverage ratio measures the extent to which a company relies on debt to finance its operations, with higher ratios indicating greater reliance on debt financing. Best Buy Co. Inc's financial leverage ratio has fluctuated over the past five years, ranging from 4.16 to 5.80.
In the most recent fiscal year ending February 3, 2024, Best Buy's financial leverage ratio stood at 4.90, showing a decrease from the previous year's ratio of 5.65. This suggests that the company reduced its dependence on debt financing in the most recent year.
Comparing the latest ratio to the ratios of the previous years, it can be observed that while Best Buy's financial leverage ratio has fluctuated over time, it remains within a relatively narrow range. This indicates that the company has maintained a consistent level of debt usage in relation to its equity over the years.
Overall, a financial leverage ratio of 4.90 for Best Buy Co. Inc as of February 3, 2024, suggests that the company has a moderate level of debt in its capital structure relative to its equity. It is important for stakeholders to monitor this ratio over time to assess the company's ability to manage its debt obligations effectively.