Dollar General Corporation (DG)
Solvency ratios
| Feb 2, 2024 | Feb 3, 2023 | Jan 28, 2022 | Jan 29, 2021 | Jan 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.16 | 0.00 | 0.13 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.40 | 0.00 | 0.30 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.67 | 0.00 | 0.43 |
| Financial leverage ratio | 4.56 | 5.25 | 4.20 | 3.88 | 3.41 |
The solvency ratios of Dollar General Corporation, as indicated by the debt-to-assets, debt-to-capital, debt-to-equity, and financial leverage ratios, show a consistent trend of low levels of debt relative to key financial metrics over the past five years.
The debt-to-assets ratio has been consistently at 0.00 for the last three years, indicating that the company has not utilized debt to finance its assets during this period. This suggests that Dollar General has a strong financial position with a low level of debt compared to its total assets.
Similarly, the debt-to-capital ratio and debt-to-equity ratio have also been at 0.00 for the same period, indicating minimal debt financing in relation to its capital structure and equity base. This highlights the company's prudent approach to managing its financial obligations and maintaining a healthy balance sheet.
Furthermore, the financial leverage ratio has shown a slight increase over the past five years, indicating a gradual increase in financial leverage. However, the ratio remains at relatively low levels, reflecting Dollar General's ability to generate sufficient earnings to cover its debt obligations.
Overall, based on the solvency ratios analyzed, Dollar General Corporation appears to have a strong solvency position with conservative leverage levels and a well-managed capital structure.
Coverage ratios
| Feb 2, 2024 | Feb 3, 2023 | Jan 28, 2022 | Jan 29, 2021 | Jan 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 7.49 | 15.75 | 20.45 | 23.64 | 22.89 |
The interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt. Dollar General Corporation's interest coverage ratio has shown a declining trend over the past five years, decreasing from 22.89 in January 2020 to 7.49 in February 2024. This indicates that Dollar General's ability to cover its interest expenses with its operating income has weakened over this period.
While the interest coverage ratio of 7.49 in February 2024 suggests that Dollar General is still generating sufficient operating income to cover its interest payments, the declining trend raises concerns about the company's ability to service its debt obligations in the future. It may indicate a higher level of financial risk or that the company's profitability is under pressure.
Comparing the current interest coverage ratio to historical values, Dollar General's ability to cover interest expenses is now notably lower than in previous years, which may warrant further investigation into the factors contributing to this decline. Investors and stakeholders should closely monitor Dollar General's financial health and management of debt levels to assess the risks associated with the company's debt servicing capabilities.