The Gap, Inc. (GAP)

Debt-to-equity ratio

		Feb 3, 2024	Jan 28, 2023	Jan 29, 2022	Jan 30, 2021	Feb 1, 2020
Long-term debt	US$ in thousands	1,488,000	1,486,000	1,484,000	2,216,000	1,249,000
Total stockholders’ equity	US$ in thousands	2,595,000	2,233,000	2,722,000	2,614,000	3,316,000
Debt-to-equity ratio		0.57	0.67	0.55	0.85	0.38

February 3, 2024 calculation

Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $1,488,000K ÷ $2,595,000K
= 0.57

The debt-to-equity ratio for The Gap, Inc. has fluctuated over the past five years, varying from 0.38 in February 2020 to 0.85 in January 2021. This ratio indicates the proportion of debt relative to equity in the company's capital structure. A lower debt-to-equity ratio suggests that the company relies more on equity financing than debt, which can be seen as a positive indicator of financial stability and lower financial risk.

In the case of The Gap, Inc., the decreasing trend in the debt-to-equity ratio from 2021 to 2024 (0.85 to 0.57) may indicate a positive shift towards a stronger balance sheet structure, reducing reliance on debt financing. This could potentially lead to lower interest expenses and improved financial health. However, it is important to consider other factors such as the company's overall financial performance and industry benchmarks in conjunction with this ratio analysis for a comprehensive evaluation of The Gap, Inc.'s financial position.