Nordstrom Inc (JWN)

From the provided data, we can observe the solvency ratios of Nordstrom Inc over the past five years. The debt-to-assets ratio has shown a decreasing trend from 0.33 in January 2023 to 0.31 in February 2024, indicating that the company has been able to reduce its reliance on debt to finance its assets.

The debt-to-capital ratio has also exhibited a declining trend from 0.79 in January 2023 to 0.75 in February 2024, suggesting that Nordstrom has improved its ability to cover its financial obligations with a combination of debt and equity.

However, the debt-to-equity ratio has fluctuated significantly over the same period, with a notable decrease from 3.86 in January 2023 to 3.08 in February 2024. This ratio indicates the extent to which the company is funded by debt compared to equity, with a higher ratio suggesting higher financial risk.

Additionally, the financial leverage ratio has fluctuated over the years, peaking at 31.27 in January 2021 and then decreasing significantly to 9.96 in February 2024. This ratio measures the company's reliance on debt financing, with a lower ratio indicating a lower level of financial risk.

Overall, it can be observed that Nordstrom Inc has shown improvements in its solvency position, as indicated by the declining trends in the debt-to-assets and debt-to-capital ratios, along with the reduction in the financial leverage ratio. However, the fluctuating debt-to-equity ratio suggests that the company's capital structure may still pose some financial risk.

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Coverage ratios

The interest coverage ratio for Nordstrom Inc has depicted fluctuations over the past five years. In the most recent fiscal year ending on February 3, 2024, the interest coverage ratio stood at 2.41, signifying that Nordstrom's ability to cover its interest expenses with operating income has decreased compared to the previous year.

In the fiscal year ended January 28, 2023, the interest coverage ratio increased to 3.63, suggesting an improvement in Nordstrom's ability to meet its interest obligations. However, this ratio was lower in the prior year, ending January 29, 2022, at 2.00.

Notably, Nordstrom faced challenges in the fiscal year ending January 30, 2021, with an interest coverage ratio of -5.78, indicating that the company's operating income was insufficient to cover its interest expenses. This negative ratio is a concerning sign as it may suggest financial distress and an inability to service debt obligations.

On a more positive note, in the fiscal year ended February 1, 2020, Nordstrom's interest coverage ratio rebounded significantly to 7.69, indicating a strong ability to cover interest payments from operating income.

Overall, the fluctuations in Nordstrom's interest coverage ratio over the five-year period reflect changing financial circumstances and operational performance. It is essential for investors and stakeholders to monitor this ratio closely to assess the company's financial health and its ability to meet debt obligations.