Best Buy Co. Inc (BBY)
Solvency ratios
| 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 | May 1, 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.08 | 0.07 | 0.07 | 0.08 | 0.07 | 0.07 | 0.08 | 0.08 | 0.07 | 0.06 | 0.07 | 0.07 | 0.07 | 0.06 | 0.04 | 0.04 | 0.08 | 0.07 | 0.08 | 0.08 |
| Debt-to-capital ratio | 0.27 | 0.29 | 0.29 | 0.29 | 0.29 | 0.28 | 0.29 | 0.30 | 0.29 | 0.22 | 0.22 | 0.23 | 0.21 | 0.24 | 0.14 | 0.15 | 0.27 | 0.28 | 0.28 | 0.26 |
| Debt-to-equity ratio | 0.38 | 0.40 | 0.40 | 0.41 | 0.42 | 0.38 | 0.41 | 0.42 | 0.40 | 0.29 | 0.29 | 0.30 | 0.27 | 0.31 | 0.17 | 0.18 | 0.36 | 0.40 | 0.38 | 0.36 |
| Financial leverage ratio | 4.90 | 6.00 | 5.40 | 5.26 | 5.65 | 5.69 | 5.33 | 5.51 | 5.80 | 4.70 | 4.29 | 4.26 | 4.16 | 5.19 | 4.61 | 4.58 | 4.48 | 5.42 | 4.56 | 4.34 |
Based on the solvency ratios of Best Buy Co. Inc over the past several reporting periods, there are some key insights to be drawn:
1. Debt-to-assets ratio: This ratio indicates the proportion of the company's assets that are financed by debt. Best Buy has consistently maintained a low debt-to-assets ratio, ranging from 0.04 to 0.08. This demonstrates that the company relies more on equity financing rather than debt to fund its operations and investments.
2. Debt-to-capital ratio: This ratio reveals the extent to which the company's capital structure is leveraged with debt. Best Buy's debt-to-capital ratio has stayed relatively stable, hovering around 0.22 to 0.30. This suggests that the company's capital is moderately leveraged, with a significant portion being funded by debt.
3. Debt-to-equity ratio: The debt-to-equity ratio provides insight into the company's financial leverage and risk exposure. Best Buy's debt-to-equity ratio has been fairly consistent, ranging from 0.17 to 0.42. This indicates that the company has a moderate level of debt compared to equity in its capital structure.
4. Financial leverage ratio: This ratio measures the company's financial risk by examining the proportion of assets that are financed by debt. Best Buy's financial leverage ratio shows some variation, ranging from 4.16 to 6.00. The fluctuations in this ratio suggest changes in the company's debt levels and risk appetite over the periods analyzed.
Overall, the solvency ratios of Best Buy Co. Inc indicate a relatively stable and prudent approach to financial management, with a consistent focus on maintaining a balanced mix of debt and equity in its capital structure. The company's low to moderate debt levels compared to assets and equity signal a healthy financial position and a manageable level of financial risk.
Coverage ratios
| 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 | May 1, 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 32.19 | 34.02 | 37.15 | 41.41 | 52.11 | 69.07 | 88.62 | 109.48 | 122.12 | 117.89 | 99.84 | 72.37 | 46.71 | 41.37 | 35.44 | 30.86 | 32.14 | 29.54 | 29.10 | 28.24 |
The interest coverage ratio for Best Buy Co. Inc has displayed a generally positive trend over the past few quarters, indicating the company's ability to comfortably meet its interest obligations using its operating income. The ratio has shown a consistent increase from 28.24 in May 2019 to 122.12 in January 2022, peaking at 122.12, before slightly declining to 32.19 in February 2024.
The substantial increase in the interest coverage ratio from 2019 to 2022 reflects an improved ability to pay interest expenses with operating income. However, the recent decline in the ratio from the peak level in January 2022 to February 2024 suggests a potential decrease in the company's operating income relative to its interest expenses.
Overall, while the interest coverage ratio has fluctuated, it remains at a relatively healthy level, indicating Best Buy's ability to comfortably cover its interest payments. Investors and creditors may find this trend favorable as it signifies the company's solid financial position in meeting its debt obligations.