ConAgra Foods Inc (CAG)

The provided financial data indicates that ConAgra Foods Inc.'s solvency ratios exhibit variability across the specified periods, suggesting changes in leverage and capital structure.

The Debt-to-Assets ratio shows a fluctuation from 0.32 on May 28, 2023, to 0.36 on May 26, 2024, indicating a modest increase in the proportion of assets financed through debt over this period. However, the ratio drops to zero on subsequent dates, which could denote reporting anomalies or a significant restructuring that resulted in no reported debt on those dates.

The Debt-to-Capital ratio follows a similar trend, rising from 0.45 on May 28, 2023, to 0.47 on May 26, 2024, implying that nearly half of the company's capital structure was financed through debt at that time. It then appears to fall to zero in later periods, again possibly reflecting changes in reporting or debt levels.

The Debt-to-Equity ratio also shows an increase from 0.81 on May 28, 2023, to 0.89 on May 26, 2024. This suggests that the company’s debt became slightly more significant relative to equity during this time frame, albeit remaining below one, indicating moderate leveraging.

The Financial Leverage Ratio, which measures the extent to which a company uses debt to finance assets, remained stable at 2.52 on May 28 and May 31, 2023, then decreased slightly to 2.47 and subsequently to 2.34 in the following periods. This decline signifies a gradual reduction in the company's reliance on debt to amplify its asset base.

Overall, the ratios reflect a period of increasing leverage up to mid-2024, followed by a marked reduction or reporting change thereafter. The overall leverage remains moderate, and the reductions in ratios in later periods suggest an improvement in financial stability or a strategic shift to lower debt levels. However, the zero values in certain periods warrant further clarification, as they may indicate data omissions or significant alterations in the company's debt structure.

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Coverage ratios

The interest coverage ratios for ConAgra Foods Inc. over the specified periods indicate a declining trend in the company's ability to meet its interest obligations from its earnings. As of May 28, 2023, the interest coverage ratio was 3.50, suggesting that the company's earnings before interest and taxes (EBIT) were 3.5 times its interest expenses, reflecting a comfortable coverage at that time. By May 31, 2023, the ratio had decreased to 3.18, signaling a slight deterioration in the company's capacity to cover interest payments from its earnings.

This downward trajectory continued into the subsequent periods. By May 26, 2024, the interest coverage had further declined to 2.62, indicating that earnings were 2.62 times the interest expenses. This decrease suggests an ongoing reduction in profitability or an increase in interest obligations. The trend persisted into May 31, 2024, with the ratio falling to 2.40, continuing the pattern of diminished coverage.

Most notably, by May 31, 2025, the interest coverage ratio had reached zero, implying that the company's earnings before interest and taxes were insufficient to cover interest expenses entirely, or potentially that interest expenses had effectively become zero or negligible in that period. This dramatic decline signals a significant deterioration in financial health concerning interest obligation coverage, raising concerns about the company's ability to service its debt solely from operational earnings.

In summary, the sequential decrease in the interest coverage ratio from 3.50 down to 0.00 over the specified periods indicates a worsening trend in ConAgra Foods Inc.'s ability to generate sufficient earnings to cover interest payments. If this trend continues, it could point to increased financial risk and potential liquidity challenges related to debt servicing.