Capri Holdings Ltd (CPRI)

The solvency ratios of Capri Holdings Ltd indicate its ability to meet its financial obligations and the extent to which it relies on debt financing. From 2020 to 2024, the debt-to-assets ratio has fluctuated between 0.15 and 0.25, showcasing the proportion of the company's assets that are financed by debt. The decreasing trend from 2022 to 2024 indicates a more conservative approach to debt utilization.

Similarly, the debt-to-capital ratio decreased from 0.50 in 2023 to 0.44 in 2024, suggesting a reduction in the reliance on debt for capital funding. This ratio demonstrates the proportion of the company's capital structure that is comprised of debt.

The debt-to-equity ratio has also shown a downward trend from 2020 to 2024, indicating a declining reliance on debt relative to equity for financing. A lower debt-to-equity ratio implies a healthier financial position and less financial risk for the company.

The financial leverage ratio, which measures the company's total assets in relation to equity, has experienced fluctuations over the years. The decreasing trend from 2020 to 2024 indicates a declining reliance on debt to finance the company's assets.

Overall, the solvency ratios of Capri Holdings Ltd suggest a more conservative approach to debt management and a strengthening financial position over the years, reflecting a healthier balance between debt and equity in its capital structure.

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Coverage ratios

The interest coverage ratio measures a company's ability to meet its interest obligations with its operating income. A higher interest coverage ratio indicates that the company is more capable of paying its interest expenses.

Looking at the trend in Capri Holdings Ltd's interest coverage ratio over the past five years, we can see significant fluctuations. In Mar 31, 2024, the interest coverage ratio was negative at -40.17, which raises concerns about the company's ability to cover its interest expenses from its operating income. This could indicate financial distress or operating inefficiencies.

In contrast, in the previous year, Mar 31, 2023, the interest coverage ratio was significantly higher at 28.29, suggesting a strong ability to cover interest payments. This positive trend continued in Mar 31, 2022, with a notably high interest coverage ratio of 50.17, indicating a robust financial position and effective management of interest expenses.

However, in Mar 31, 2021, the interest coverage ratio dropped to 3.17, which may raise concerns about the company's ability to comfortably cover its interest obligations. This significant decrease could be a red flag for investors and creditors.

Furthermore, in Mar 31, 2020, the interest coverage ratio was negative at -24.00, indicating a potential inability of the company to cover its interest expenses with its operating income.

Overall, it is important for stakeholders to closely monitor Capri Holdings Ltd's interest coverage ratio, as the significant fluctuations observed over the years could signal varying levels of financial risk and operational performance.