Dollar Tree Inc (DLTR)

Solvency ratios

Feb 3, 2024 Jan 28, 2023 Jan 29, 2022 Jan 30, 2021 Feb 1, 2020
Debt-to-assets ratio 0.16 0.15 0.16 0.16 0.18
Debt-to-capital ratio 0.32 0.28 0.31 0.31 0.36
Debt-to-equity ratio 0.47 0.39 0.44 0.44 0.56
Financial leverage ratio 3.01 2.63 2.81 2.84 3.13

Dollar Tree Inc's solvency ratios reflect upon its ability to meet its financial obligations and manage its debt effectively over the years. The debt-to-assets ratio has remained relatively stable around 0.16 in recent years, indicating that the company has a low level of debt compared to its total assets.

The debt-to-capital ratio and debt-to-equity ratio show a similar trend, with slight fluctuations but generally staying within a reasonable range. The debt-to-capital ratio has increased slightly from 0.28 in 2023 to 0.32 in 2024, while the debt-to-equity ratio has also shown a slight upward trend, reaching 0.47 in 2024.

The financial leverage ratio, which measures the proportion of the company's debt to its equity, indicates that Dollar Tree Inc has a high level of leverage with a ratio consistently above 2.5 over the years. This suggests that the company relies more on debt financing than equity financing to fund its operations and investments.

Overall, while Dollar Tree Inc's solvency ratios suggest a certain level of financial risk due to its high leverage, the company's ability to maintain stable debt-to-assets and debt-to-capital ratios implies a relatively healthy financial position in managing its debt obligations.


Coverage ratios

Feb 3, 2024 Jan 28, 2023 Jan 29, 2022 Jan 30, 2021 Feb 1, 2020
Interest coverage -149.46 588.50 1,646.73 589.97 525.92

The interest coverage ratio of Dollar Tree Inc has fluctuated significantly over the past five years. In the most recent fiscal year ending on February 3, 2024, the interest coverage ratio was -149.46, indicating that the company's operating income was insufficient to cover its interest expenses, resulting in a negative coverage. This could raise concerns about the company's ability to meet its debt obligations using its operating earnings.

In the preceding fiscal year ending on January 28, 2023, the interest coverage ratio improved substantially to 588.50, suggesting that Dollar Tree Inc was generating significantly more operating income relative to its interest expenses. This positive trend continued into the fiscal year ending on January 29, 2022, with the interest coverage ratio reaching 1,646.73, indicating a strong ability to cover interest payments.

However, in the fiscal year ending on January 30, 2021, the interest coverage ratio dropped to 589.97, while in the fiscal year ending on February 1, 2020, it stood at 525.92. These figures suggest some fluctuations in the company's ability to cover interest expenses during these periods.

Overall, Dollar Tree Inc's interest coverage ratio has displayed notable variability, with both positive and negative trends over the past five years. It is essential for investors and stakeholders to closely monitor this ratio to assess the company's financial health and its ability to meet its debt obligations.


See also:

Dollar Tree Inc Solvency Ratios