Helen of Troy Ltd (HELE)
Solvency ratios
| Feb 29, 2024 | Feb 28, 2023 | Feb 28, 2022 | Feb 28, 2021 | Feb 29, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.23 | 0.32 | 0.29 | 0.15 | 0.18 |
| Debt-to-capital ratio | 0.29 | 0.38 | 0.38 | 0.22 | 0.23 |
| Debt-to-equity ratio | 0.40 | 0.62 | 0.61 | 0.28 | 0.29 |
| Financial leverage ratio | 1.73 | 1.96 | 2.13 | 1.83 | 1.64 |
The solvency ratios of Helen of Troy Ltd over the past five years show a generally improving trend in the company's ability to meet its financial obligations.
The debt-to-assets ratio has decreased from 0.32 in 2023 to 0.23 in 2024, indicating that the company has been able to reduce its reliance on debt to finance its assets. This implies a lower financial risk associated with the company's asset base.
Similarly, the debt-to-capital ratio has also shown improvement, declining from 0.38 in 2023 to 0.29 in 2024. This indicates that the company's capital structure has become more balanced, with a lower proportion of debt in relation to total capital.
The debt-to-equity ratio has followed a similar trend, dropping from 0.62 in 2023 to 0.40 in 2024. This suggests that Helen of Troy Ltd has reduced its dependence on debt funding in relation to equity, which can enhance the company's financial stability and resilience.
The financial leverage ratio, which measures the extent to which the company relies on debt financing, has also shown improvement, decreasing from 1.96 in 2023 to 1.73 in 2024. A lower financial leverage ratio indicates that the company has a lower level of debt relative to its equity, signaling reduced financial risk.
Overall, the declining trend in these solvency ratios reflects positively on the company's financial health and indicates a strengthening position in terms of its ability to meet its debt obligations and sustain long-term financial stability.
Coverage ratios
| Feb 29, 2024 | Feb 28, 2023 | Feb 28, 2022 | Feb 28, 2021 | Feb 29, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 4.94 | 5.20 | 21.24 | 22.35 | 14.06 |
Interest coverage measures a company's ability to pay interest expenses on its debt. Helen of Troy Ltd's interest coverage ratio has shown a declining trend over the past five years, from 22.35 in 2021 to 4.94 in 2024. This indicates that the company's ability to cover its interest payments with its operating income has weakened over time.
High interest coverage ratios like those seen in 2021 and 2022 (21.24 and 22.35, respectively) suggest a strong ability to meet interest obligations using operating earnings. However, the significant decrease in the interest coverage ratio in 2024 raises a concern about the company's ability to service its debt in the future.
It is important for investors and creditors to monitor Helen of Troy Ltd's interest coverage closely to assess the company's financial health and its capacity to manage debt effectively.