Nordstrom Inc (JWN)
Solvency ratios
| Jan 31, 2025 | Oct 31, 2024 | Jul 31, 2024 | Apr 30, 2024 | Feb 3, 2024 | Jan 31, 2024 | Oct 31, 2023 | Oct 28, 2023 | Jul 31, 2023 | Jul 29, 2023 | Apr 30, 2023 | Apr 29, 2023 | Jan 31, 2023 | Jan 28, 2023 | Oct 31, 2022 | Oct 29, 2022 | Jul 31, 2022 | Jul 30, 2022 | Apr 30, 2022 | Jan 31, 2022 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.31 | 0.00 | 0.00 | 0.29 | 0.00 | 0.30 | 0.00 | 0.30 | 0.00 | 0.33 | 0.00 | 0.30 | 0.00 | 0.31 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.75 | 0.00 | 0.00 | 0.78 | 0.00 | 0.79 | 0.00 | 0.83 | 0.00 | 0.79 | 0.00 | 0.82 | 0.00 | 0.81 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 3.08 | 0.00 | 0.00 | 3.58 | 0.00 | 3.87 | 0.00 | 4.73 | 0.00 | 3.86 | 0.00 | 4.71 | 0.00 | 4.30 | 0.00 | 0.00 |
| Financial leverage ratio | 7.86 | 9.44 | 9.12 | 10.14 | 9.96 | 9.96 | 12.36 | 12.36 | 13.06 | 13.06 | 16.02 | 16.02 | 11.83 | 11.83 | 15.50 | 15.50 | 13.82 | 13.82 | 15.58 | 15.27 |
Nordstrom Inc's solvency ratios provide insight into the company's ability to meet its long-term financial obligations.
1. Debt-to-assets ratio: This ratio measures the proportion of Nordstrom's assets financed by debt. The trend for this ratio shows a slight increase from 0% in January 2022 to around 0.33 by January 2024, indicating that the company is gradually relying more on debt to finance its assets.
2. Debt-to-capital ratio: The debt-to-capital ratio highlights the extent of Nordstrom's capital structure comprising debt. The ratio starts at 0% in January 2022, spikes to peak around 0.83 in April 2023, and then decreases to 0.75 by February 2024. This suggests fluctuations in the company's debt relative to its total capital structure over the period.
3. Debt-to-equity ratio: This ratio depicts the relationship between Nordstrom's debt and equity, showing the proportion of financing from each source. The trend reveals an increase in the ratio from 0% in January 2022 to 3.08 in February 2024, indicating a rise in debt relative to equity financing over time.
4. Financial leverage ratio: The financial leverage ratio signifies the company's reliance on debt in its capital structure. The ratio decreases consistently from 15.27 in January 2022 to 7.86 in January 2025, suggesting a reduction in Nordstrom's overall leverage and potential financial risk.
Overall, Nordstrom's solvency ratios demonstrate some shifts in its financing mix over the analyzed period, with fluctuations in debt levels relative to assets, capital, and equity. The decreasing trend in the financial leverage ratio indicates an improvement in the company's ability to meet its long-term debt obligations and potentially reduce financial risk.
Coverage ratios
| Jan 31, 2025 | Oct 31, 2024 | Jul 31, 2024 | Apr 30, 2024 | Feb 3, 2024 | Jan 31, 2024 | Oct 31, 2023 | Oct 28, 2023 | Jul 31, 2023 | Jul 29, 2023 | Apr 30, 2023 | Apr 29, 2023 | Jan 31, 2023 | Jan 28, 2023 | Oct 31, 2022 | Oct 29, 2022 | Jul 31, 2022 | Jul 30, 2022 | Apr 30, 2022 | Jan 31, 2022 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 2.24 | 2.08 | 5.62 | -6.68 | -5.65 | -19.46 | -19.99 | -10.87 | -13.81 | -1.17 | -1.20 | 0.95 | 2.97 | 3.16 | 3.11 | 3.56 | 5.71 | 6.47 | 5.83 | 6.18 |
The interest coverage ratio of Nordstrom Inc has shown fluctuating trends over the period represented in the data. The ratio was relatively stable and healthy from January 2022 to January 2023, ranging between 2.97 to 6.47, indicating that the company was comfortably able to meet its interest obligations with its earnings. However, starting from April 2023, the interest coverage ratio deteriorated significantly, dropping below 1 and even turning negative in subsequent periods.
The sharp decline in the interest coverage ratio from April 2023 onwards signifies that Nordstrom's ability to cover its interest payments with operating income has weakened considerably. Additionally, the negative interest coverage ratios recorded in the latter half of 2023 and early 2024 suggest that the company's earnings were insufficient to service its interest expense, raising concerns about its financial health and solvency.
It is essential for investors and stakeholders to closely monitor Nordstrom's interest coverage ratio going forward to assess the company's ability to manage its debt obligations and maintain financial stability. Management actions such as improving profitability, reducing debt levels, or restructuring liabilities may be necessary to address the declining trend in the interest coverage ratio and enhance the company's financial performance.