Foot Locker Inc (FL)

Based on the solvency ratios of Foot Locker Inc provided, the company demonstrates a strong financial position with consistently low debt levels relative to its assets, capital, and equity.

The Debt-to-assets ratio, which measures the proportion of assets financed by debt, shows a decreasing trend over the years, with the ratio being at 0.00 for most recent periods. This indicates that the company's assets are primarily funded through equity rather than debt.

The Debt-to-capital ratio expresses the percentage of capital that comes from debt, and like the Debt-to-assets ratio, it also shows a declining trend and is at 0.00 for the latest period. This implies that Foot Locker relies more on equity financing than debt financing.

The Debt-to-equity ratio, which indicates the extent to which debt is used to finance operations relative to equity, displays a similar declining trend and is at 0.00 for the most recent year. This suggests that the company has a conservative approach to leverage and maintains a healthy balance between debt and equity.

Lastly, the Financial leverage ratio, which measures the company's ability to meet its financial obligations, has also decreased over the years, reflecting a downward trend in leverage levels. This indicates that Foot Locker has relatively low financial leverage and is efficient in managing its debt levels.

In conclusion, Foot Locker Inc's solvency ratios suggest that the company has a strong financial position with prudent debt management practices, low leverage, and a healthy balance between debt and equity financing.

---

Coverage ratios

Interest coverage is an important financial ratio that indicates a company's ability to meet its interest obligations with its earnings. A higher interest coverage ratio is generally seen as more favorable, as it suggests a company is more capable of servicing its debt.

Analyzing Foot Locker Inc's interest coverage ratio over the years, we observe the following:

- As of January 28, 2023, the interest coverage ratio was 29.05, indicating that Foot Locker had a strong ability to cover its interest payments with its earnings.
- By January 31, 2023, the interest coverage ratio improved further to 43.40, highlighting an even stronger capacity to meet interest obligations.
- However, a sharp decline was seen by January 31, 2024, with an interest coverage ratio of -44.33. A negative interest coverage ratio suggests that the company's earnings were not sufficient to cover its interest expenses during that period, which raises concerns about its financial health.
- By February 3, 2024, the interest coverage ratio recovered to 7.47, but still remained relatively low compared to previous years.
- On January 31, 2025, the interest coverage ratio further dropped to 4.62, signaling continued challenges in meeting interest payments from the company's earnings.

In summary, while Foot Locker Inc demonstrated strong interest coverage in the past, the significant decline in the ratio to negative levels in 2024 raises red flags about its financial stability and ability to service its debt. The subsequent improvement in 2024 and further decline in 2025 indicate ongoing volatility in the company's financial performance and its ability to cover interest expenses.