Helen of Troy Ltd (HELE)
Solvency ratios
| Feb 28, 2025 | Feb 29, 2024 | Feb 28, 2023 | Feb 28, 2022 | Feb 28, 2021 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 1.86 | 1.73 | 1.96 | 2.13 | 1.83 |
Helen of Troy Ltd has consistently maintained a strong solvency position, as indicated by its low debt-to-assets, debt-to-capital, and debt-to-equity ratios, all of which have been at 0.00 for the past five years. This suggests that the company is not heavily reliant on debt to finance its operations and that its assets are primarily funded by equity.
Additionally, the financial leverage ratio has shown some fluctuation over the years, ranging from 1.73 to 2.13. While this ratio measures the extent to which a company relies on debt financing, it also takes into account other liabilities and equity, indicating the proportion of total assets that are financed by debt. Overall, Helen of Troy Ltd's financial leverage ratio has remained relatively stable and within a moderate range, further supporting the company's strong solvency position.
In conclusion, Helen of Troy Ltd's solvency ratios reflect a prudent and conservative approach to capital structure, with minimal debt levels and a healthy balance between debt and equity financing.
Coverage ratios
| Feb 28, 2025 | Feb 29, 2024 | Feb 28, 2023 | Feb 28, 2022 | Feb 28, 2021 | |
|---|---|---|---|---|---|
| Interest coverage | 2.77 | 4.94 | 5.20 | 20.87 | 22.01 |
The interest coverage ratio for Helen of Troy Ltd has shown a declining trend over the past five years. In February 2021, the interest coverage stood at a healthy level of 22.01, indicating the company's ability to cover its interest expenses over 22 times with its operating income. However, this ratio decreased to 20.87 in February 2022, suggesting a slight deterioration in the company's ability to cover its interest obligations.
In the following years, the interest coverage ratio experienced a more significant decline. By February 2023, the ratio dropped to 5.20, indicating that the company's operating income could cover its interest expenses only 5.20 times. This declining trend continued in February 2024 and February 2025, with interest coverage ratios of 4.94 and 2.77, respectively.
The decreasing trend in the interest coverage ratio raises concerns about Helen of Troy Ltd's ability to service its interest payments from its operating income. A lower interest coverage ratio may signal increased financial risk, as it implies a higher dependency on the company's operating performance to meet its interest obligations. This trend suggests the need for a closer examination of the company's financial health and the efficiency of its operations to ensure sustainable financial stability in the future.