Campbell’s Co (CPB)

The analysis of Campbell’s Co. solvency ratios based on the provided data reveals several notable points regarding its financial stability and leverage position.

Firstly, the debt-related ratios—specifically the debt-to-assets ratio, debt-to-capital ratio, and debt-to-equity ratio—consistently indicate a value of zero across all examined periods. This persistent nil reading suggests that the company currently maintains no reported long-term or short-term debt, implying an absence of leveraged liabilities during the specified dates. Such a debt-free capital structure highlights a conservative approach to financing, potentially reducing financial risk but also possibly limiting growth opportunities that might be fueled by borrowing.

Secondly, the financial leverage ratio, which measures the degree of financial leverage employed by the company, exhibits more variability. As of July 30, and July 31, 2023, the ratio stands at 3.29. It then increases to 4.02 by July 28 and 31, 2024, before slightly declining to 3.82 in July 31, 2025. The elevated leverage ratio indicates that the company is employing a considerable level of financial leverage relative to its equity base, generally implying a higher degree of financial risk. The fluctuations suggest an increased leverage position around mid-2024, though this remains within a moderate range.

Overall, the zero debt ratios imply the absence of debt financing, pointing to a risk-averse capital structure. Meanwhile, the high financial leverage ratios indicate that while the company might not currently utilize debt, it could be employing significant operational or non-debt financial structures that influence its leverage measure. The combination of these ratios suggests that Campbell’s Co. maintains a conservative debt policy, coupled with a leverage ratio that warrants attention, as it could impact the company’s solvency and financial flexibility in adverse conditions.

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Coverage ratios

The interest coverage ratios for Campbell’s Co over the provided periods indicate a noteworthy trend in the company's ability to meet its interest obligations from its earnings before interest and taxes (EBIT). As of July 30 and July 31, 2023, the interest coverage ratios are notably high at 7.00 and 6.98, respectively. These figures suggest that the company had a comfortable buffer to cover its interest expenses, with earnings approximately seven times the interest obligations, which is generally considered a strong position.

Moving forward into the fiscal periods around July 28 and July 31, 2024, the interest coverage ratio declines to approximately 4.04 and 4.02. Although this indicates a reduction in the company's ability to cover interest costs, the ratio remains above 4, generally reflecting a healthy financial position. The decline may point to a reduction in EBIT or increased interest expenses, but the company still maintains sufficient earnings to meet its interest commitments with a substantial margin.

By July 31, 2025, the interest coverage ratio further decreases to approximately 3.43. While this ratio is lower than in previous periods, it still suggests that the company is earning roughly three and a third times its interest expenses. This level of coverage is often regarded as acceptable, though it indicates a potential tightening of financial flexibility and a need for ongoing monitoring. A ratio approaching 3 may signal increased financial risk if negative earnings trends or unexpected expenses arise.

Overall, Campbell’s Co’s interest coverage illustrates a downward trend over the periods examined, transitioning from a robust coverage level above 6 to a more moderate level around 3.4. This pattern warrants attention as it could reflect evolving operational or financial pressures. Continuous analysis of earnings, interest expenses, and broader liquidity conditions will be essential for assessing the company's ongoing capacity to service its debt obligations comfortably.