National Vision Holdings Inc (EYE)

The solvency ratios of National Vision Holdings Inc indicate the company's ability to meet its financial obligations and manage its debt levels effectively over the last five years.

The trend in the debt-to-assets ratio has shown a decreasing pattern from 0.26 in 2019 to 0.20 in 2023, reflecting that the company has improved its ability to cover its liabilities with its assets. This suggests a stronger financial position and lower risk of insolvency.

Similarly, the debt-to-capital ratio has also decreased over the years, indicating a decline in the proportion of debt in the company's capital structure. This trend suggests that National Vision Holdings Inc is relying less on debt to finance its operations, which could lead to lower interest expenses and reduced financial risk.

The debt-to-equity ratio has shown a decreasing trend from 0.68 in 2019 to 0.53 in 2023, indicating that the company's reliance on debt in relation to equity has decreased. A lower debt-to-equity ratio generally implies a lower financial risk and a healthier balance sheet structure.

The financial leverage ratio has fluctuated over the years but has remained relatively stable. A financial leverage ratio of 2.62 in 2019 and 2023 suggests that the company is using debt to finance a significant portion of its assets. While this could potentially lead to higher returns on equity, it also indicates higher financial risk.

Overall, the solvency ratios of National Vision Holdings Inc have shown positive trends, with decreasing debt ratios indicating a stronger financial position and better debt management over the years. However, the company should continue to monitor and optimize its debt levels to ensure sustainable financial health.

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Coverage ratios

The interest coverage ratio for National Vision Holdings Inc has shown significant fluctuations over the past five years.

In 2019 and 2020, the company had lower interest coverage ratios of 1.88 and 1.67, indicating that the company's operating income was just sufficient to cover its interest expenses during those years. This suggests that National Vision Holdings Inc might have been at risk of defaulting on its interest payments during these periods.

However, there was a substantial improvement in the interest coverage ratio in 2021 to 59.85, indicating a much healthier financial position where the company's operating income was significantly higher in relation to its interest expenses. This could be a result of improved profitability or better cost management.

The interest coverage ratio then sharply declined in 2022 to 26.16, which may suggest an increase in interest expenses or a decrease in operating income compared to the previous year.

The most recent data for 2023 shows a negative interest coverage ratio of -27.96, which is a concerning sign. A negative interest coverage ratio indicates that the company's operating income is insufficient to cover its interest expenses. This could raise questions about the company's financial stability and its ability to meet its debt obligations in the near future.

Overall, the fluctuating trend in National Vision Holdings Inc's interest coverage ratio highlights the importance of closely monitoring the company's financial performance and debt management strategies to ensure it remains in a sustainable financial position.