Best Buy Co. Inc (BBY)
Solvency ratios
| Feb 1, 2025 | Nov 2, 2024 | Aug 3, 2024 | May 4, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.08 | 0.07 | 0.07 | 0.08 | 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 |
| Debt-to-capital ratio | 0.29 | 0.27 | 0.27 | 0.27 | 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 |
| Debt-to-equity ratio | 0.41 | 0.37 | 0.37 | 0.37 | 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 |
| Financial leverage ratio | 5.26 | 5.52 | 5.03 | 4.79 | 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 |
Best Buy Co. Inc's solvency ratios provide insights into the company's ability to meet its long-term financial obligations.
1. Debt-to-assets ratio: Best Buy has maintained a relatively low debt-to-assets ratio, with values ranging from 0.04 to 0.08 over the observed period. This indicates that the company relies minimally on debt financing to support its assets.
2. Debt-to-capital ratio: The debt-to-capital ratio shows a moderate increase from around 0.14 in August 2020 to approximately 0.29 in February 2025. This suggests that the proportion of Best Buy's capital financed by debt has been increasing gradually over time.
3. Debt-to-equity ratio: Similar to the debt-to-capital ratio, the debt-to-equity ratio has also shown a general upward trend, moving from 0.17 in August 2020 to 0.41 in February 2025. This indicates that Best Buy's reliance on equity as opposed to debt for financing has decreased over the period.
4. Financial leverage ratio: Best Buy's financial leverage ratio has fluctuated between 4.16 and 6.00 during the observed timeframe. The higher values in recent periods suggest an increased level of financial risk as the company utilizes additional debt to finance its operations.
Overall, while Best Buy has maintained a low debt-to-assets ratio, the increasing trends in the debt-to-capital, debt-to-equity, and financial leverage ratios indicate a shift towards more debt financing. This could potentially increase the company's financial risk and impact its long-term solvency. Investors and creditors may closely monitor these ratios to assess Best Buy's ability to manage its debt and meet its financial obligations in the future.
Coverage ratios
| Feb 1, 2025 | Nov 2, 2024 | Aug 3, 2024 | May 4, 2024 | 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 26.47 | 32.92 | 32.15 | 32.33 | 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 |
Best Buy Co. Inc's interest coverage ratio has witnessed a generally positive trend over the past few years, indicating the company's ability to meet its interest obligations comfortably.
The interest coverage ratio has consistently improved from 30.86 as of May 2, 2020, reaching a peak of 122.12 on January 29, 2022. During this period, the company's operational earnings were sufficient to cover its interest expenses, reflecting a strong financial position.
However, there was a slight decline in the interest coverage ratio after January 29, 2022, with fluctuations observed in subsequent periods. Despite this, the company maintained a comfortable interest coverage level above 30, which is generally considered a healthy sign.
As of the latest available data on February 1, 2025, the interest coverage ratio stands at 26.47, indicating a decrease from previous highs but still above the threshold of 1, suggesting that Best Buy Co. Inc can adequately cover its interest payments with its earnings. As an analyst, it would be important to monitor future trends in the interest coverage ratio to ensure the company's ability to manage its debt obligations effectively.