Nordstrom Inc (JWN)
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 | 2,612,000 | 2,856,000 | 2,853,000 | — | — |
| Total stockholders’ equity | US$ in thousands | 848,000 | 739,000 | 581,000 | 305,000 | 979,000 |
| Debt-to-equity ratio | 3.08 | 3.86 | 4.91 | 0.00 | 0.00 |
February 3, 2024 calculation
Debt-to-equity ratio = Long-term debt ÷ Total stockholders’ equity
= $2,612,000K ÷ $848,000K
= 3.08
The debt-to-equity ratio of Nordstrom Inc has shown a decreasing trend over the past five years, indicating a reduction in the company's reliance on debt to finance its operations. In the most recent fiscal year, as of February 3, 2024, the ratio stood at 3.08, which is lower compared to the previous year's figure of 3.86. This suggests that Nordstrom has improved its capital structure by reducing its debt relative to equity.
The significant decrease in the debt-to-equity ratio from 4.91 in January 2022 to 3.08 in February 2024 reflects a marked decrease in the level of debt compared to equity. A high debt-to-equity ratio can point to higher financial risk, as it indicates that a company is primarily financed by debt rather than equity. Therefore, Nordstrom's decreasing trend in this ratio signifies a positive shift towards a more balanced and potentially less risky capital structure.
It is noteworthy that in both January 2021 and February 2020, the debt-to-equity ratios were recorded as 0.00, indicating that Nordstrom may have been operating with little to no debt during those years. However, it is essential to consider the industry norms and company's specific circumstances when evaluating the significance of these ratios. Overall, the downward trend in Nordstrom Inc's debt-to-equity ratio reflects a move towards a more sustainable and balanced financial position.
Peer comparison
Feb 3, 2024