Dollar Tree Inc (DLTR)
Solvency ratios
| Jan 31, 2025 | Oct 31, 2024 | Jul 31, 2024 | Apr 30, 2024 | Feb 3, 2024 | Jan 31, 2024 | Oct 31, 2023 | Oct 28, 2023 | Jul 31, 2023 | Jul 29, 2023 | Apr 30, 2023 | Apr 29, 2023 | Jan 31, 2023 | Jan 28, 2023 | Oct 31, 2022 | Oct 29, 2022 | Jul 31, 2022 | Jul 30, 2022 | Apr 30, 2022 | Jan 31, 2022 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.16 | 0.00 | 0.00 | 0.14 | 0.00 | 0.15 | 0.00 | 0.15 | 0.00 | 0.15 | 0.00 | 0.15 | 0.00 | 0.15 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.32 | 0.00 | 0.00 | 0.28 | 0.00 | 0.27 | 0.00 | 0.28 | 0.00 | 0.28 | 0.00 | 0.29 | 0.00 | 0.29 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.47 | 0.00 | 0.00 | 0.38 | 0.00 | 0.38 | 0.00 | 0.38 | 0.00 | 0.39 | 0.00 | 0.41 | 0.00 | 0.41 | 0.00 | 0.00 |
| Financial leverage ratio | 1.00 | 3.06 | 3.06 | 3.02 | 3.01 | 3.01 | 2.67 | 2.67 | 2.59 | 2.59 | 2.60 | 2.60 | 2.63 | 2.63 | 2.77 | 2.77 | 2.70 | 2.70 | 2.71 | 2.81 |
The solvency ratios of Dollar Tree Inc indicate its ability to meet its long-term financial obligations.
1. Debt-to-assets ratio:
- Dollar Tree's debt-to-assets ratio fluctuated but remained relatively low over the period, indicating that the company has a lower reliance on debt to finance its assets.
- The ratio was highest in July 2022 and reduced to 0.00 by January 2024 and remained at that level until January 2025.
2. Debt-to-capital ratio:
- Dollar Tree's debt-to-capital ratio also showed variations but was generally low, suggesting a conservative capital structure.
- The ratio increased in early 2024 but decreased back to 0.00 by October 2024 and remained at that level until January 2025.
3. Debt-to-equity ratio:
- Dollar Tree's debt-to-equity ratio exhibited a similar trend to the other solvency ratios, with fluctuations but maintaining a relatively low level overall.
- The ratio peaked in February 2024 at 0.47 but decreased to 0.00 by October 2024 and remained at that level until January 2025.
4. Financial leverage ratio:
- Dollar Tree's financial leverage ratio indicates the company's level of debt relative to its equity and assets.
- The ratio increased notably in early 2024 but decreased to 1.00 by January 2025, reflecting a decrease in financial leverage and potentially a stronger financial position.
Overall, based on the solvency ratios, Dollar Tree Inc appears to have maintained a conservative approach to managing its debt and capital structure, with a gradual reduction in leverage towards the end of the period, which could be a positive indicator for the company's long-term financial health and stability.
Coverage ratios
| Jan 31, 2025 | Oct 31, 2024 | Jul 31, 2024 | Apr 30, 2024 | Feb 3, 2024 | Jan 31, 2024 | Oct 31, 2023 | Oct 28, 2023 | Jul 31, 2023 | Jul 29, 2023 | Apr 30, 2023 | Apr 29, 2023 | Jan 31, 2023 | Jan 28, 2023 | Oct 31, 2022 | Oct 29, 2022 | Jul 31, 2022 | Jul 30, 2022 | Apr 30, 2022 | Jan 31, 2022 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 15.82 | -8.72 | -29.82 | -28.49 | -28.03 | -8.98 | 10.80 | 12.39 | 14.12 | 16.78 | 19.25 | 17.77 | 16.46 | 15.21 | 14.01 | 16.60 | 13.29 | 10.71 | 9.71 | 7.88 |
The interest coverage ratio for Dollar Tree Inc shows fluctuations over the given time period. The interest coverage ratio improved consistently from January 2022 to April 2023, indicating the company's ability to cover its interest obligations with operating income. The ratio peaked at 19.25 in April 2023, reflecting a strong ability to meet interest payments.
However, starting from July 2023, the interest coverage ratio began to decline, showing signs of weakening. This trend continued into the following quarters, with the ratio falling into negative territory in January 2024 and reaching its lowest point of -29.82 in July 2024. A negative interest coverage ratio implies that the company's operating income was insufficient to cover its interest expenses during those periods.
The significant decline in the interest coverage ratio in the latter half of the observed period could indicate financial distress or challenges in generating enough earnings to meet interest obligations. It is essential for Dollar Tree Inc to closely monitor its interest coverage ratio and take necessary steps to improve profitability and liquidity to ensure the sustainability of its operations.