The Gap, Inc. (GAP)

Solvency ratios

Aug 3, 2024 May 4, 2024 Feb 3, 2024 Oct 28, 2023 Jul 29, 2023 Apr 29, 2023 Jan 28, 2023 Oct 29, 2022 Jul 30, 2022 Apr 30, 2022 Jan 29, 2022 Oct 30, 2021 Jul 31, 2021 May 1, 2021 Jan 30, 2021 Oct 31, 2020 Aug 1, 2020 May 2, 2020 Feb 1, 2020 Nov 2, 2019
Debt-to-assets ratio 0.13 0.14 0.13 0.13 0.14 0.14 0.13 0.12 0.12 0.12 0.12 0.12 0.16 0.16 0.16 0.15 0.16 0.10 0.09 0.09
Debt-to-capital ratio 0.34 0.35 0.36 0.38 0.40 0.40 0.40 0.37 0.39 0.38 0.35 0.35 0.42 0.44 0.46 0.48 0.50 0.35 0.27 0.26
Debt-to-equity ratio 0.51 0.55 0.57 0.60 0.66 0.68 0.67 0.58 0.64 0.61 0.55 0.53 0.74 0.79 0.85 0.93 0.98 0.54 0.38 0.34
Financial leverage ratio 3.97 4.03 4.26 4.49 4.79 5.00 5.10 4.67 5.28 4.99 4.69 4.59 4.56 4.85 5.27 6.06 6.09 5.49 4.13 3.88

Based on the solvency ratios of The Gap, Inc. over the past few periods, we can observe the following trends:

1. Debt-to-assets ratio has remained relatively stable around 0.13 to 0.16, indicating that the company has been able to maintain a low level of debt compared to its total assets.

2. The debt-to-capital ratio has shown some fluctuation, ranging from 0.34 to 0.50. This ratio reflects the proportion of the company's capital that is funded by debt, and the upward trend suggests that The Gap, Inc. has been relying more on debt to finance its operations.

3. Debt-to-equity ratio has been increasing over time, from 0.51 to 0.98, indicating a higher reliance on debt financing relative to equity. This trend could potentially signal increased financial risk for the company, as higher levels of debt may lead to higher interest payments and potential liquidity challenges.

4. The financial leverage ratio has shown fluctuations between 3.97 and 6.09, indicating that the company's financial leverage has been varying significantly over the periods. A higher financial leverage ratio suggests that the company has higher financial risk and is more reliant on debt to finance its operations.

Overall, while The Gap, Inc. has maintained a low debt-to-assets ratio, the increasing trend in the debt-to-capital and debt-to-equity ratios, along with fluctuations in the financial leverage ratio, indicate a shift towards greater reliance on debt financing and potentially increased financial risk in recent periods.


Coverage ratios

Aug 3, 2024 May 4, 2024 Feb 3, 2024 Oct 28, 2023 Jul 29, 2023 Apr 29, 2023 Jan 28, 2023 Oct 29, 2022 Jul 30, 2022 Apr 30, 2022 Jan 29, 2022 Oct 30, 2021 Jul 31, 2021 May 1, 2021 Jan 30, 2021 Oct 31, 2020 Aug 1, 2020 May 2, 2020 Feb 1, 2020 Nov 2, 2019
Interest coverage 11.02 9.91 7.18 4.24 3.51 1.63 -0.58 -0.28 -3.73 0.40 2.93 2.95 4.38 2.52 -4.74 -8.55 -10.80 -12.77 7.95 15.90

The interest coverage ratio for The Gap, Inc. fluctuated over the period analyzed. It started at a healthy level around 15.90 in Nov 2019, indicating the company's ability to cover interest expenses almost 16 times with its earnings. However, the ratio declined steadily, reaching a negative level in Jan 2023, suggesting the company's earnings were insufficient to cover its interest expenses during that period.

Subsequently, there was a partial recovery in the interest coverage ratio, with fluctuations but still remaining below 1 in the negative range until May 2021. From then on, there was an upward trend, showing an improving ability to cover interest expenses. By Aug 2024, the interest coverage ratio was at a level of 11.02, indicating that the company's earnings were exceeding its interest expenses by more than 11 times.

Overall, The Gap, Inc. has shown volatility in its interest coverage ratio in recent periods, with significant improvements in recent quarters suggesting a more stable financial position.