CarMax Inc (KMX)
Solvency ratios
| Feb 28, 2025 | Nov 30, 2024 | Aug 31, 2024 | May 31, 2024 | Feb 29, 2024 | Nov 30, 2023 | Aug 31, 2023 | May 31, 2023 | Feb 28, 2023 | Nov 30, 2022 | Aug 31, 2022 | May 31, 2022 | Feb 28, 2022 | Nov 30, 2021 | Aug 31, 2021 | May 31, 2021 | Feb 28, 2021 | Nov 30, 2020 | Aug 31, 2020 | May 31, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-equity ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Financial leverage ratio | 4.39 | 4.39 | 4.42 | 4.42 | 4.53 | 4.50 | 4.55 | 4.63 | 4.66 | 4.73 | 4.89 | 4.88 | 5.03 | 5.01 | 4.98 | 4.85 | 4.94 | 5.07 | 5.33 | 5.58 |
CarMax Inc's solvency ratios indicate a strong financial position with consistently low debt levels relative to its assets, capital, and equity. The debt-to-assets, debt-to-capital, and debt-to-equity ratios have been consistently at 0.00 across multiple reporting periods, reflecting that the company operates with minimal debt obligations in relation to its overall financial resources.
Furthermore, the financial leverage ratio, which measures the proportion of the company's total assets that are financed by debt, has been decreasing over time. This decreasing trend, from 5.58 in May 2020 to 4.39 in February 2025, highlights the company's reduced reliance on borrowed funds to support its operations and investments.
Overall, CarMax Inc's solvency ratios suggest a healthy financial standing and a conservative approach to managing debt, which bodes well for its long-term stability and ability to weather economic uncertainties.
Coverage ratios
| Feb 28, 2025 | Nov 30, 2024 | Aug 31, 2024 | May 31, 2024 | Feb 29, 2024 | Nov 30, 2023 | Aug 31, 2023 | May 31, 2023 | Feb 28, 2023 | Nov 30, 2022 | Aug 31, 2022 | May 31, 2022 | Feb 28, 2022 | Nov 30, 2021 | Aug 31, 2021 | May 31, 2021 | Feb 28, 2021 | Nov 30, 2020 | Aug 31, 2020 | May 31, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 1.30 | 1.05 | 0.79 | 0.83 | 0.92 | 1.03 | 1.18 | 1.38 | 1.88 | 2.49 | 3.50 | 4.27 | 5.98 | 7.84 | 7.08 | 6.53 | 4.10 | 4.17 | 3.60 | 3.19 |
CarMax Inc's interest coverage has exhibited fluctuations over the periods indicated. The interest coverage ratio, a measure of a company's ability to pay interest expenses on its outstanding debt, increased steadily from May 2021 to November 2021, indicating a stronger ability to cover interest obligations. However, the ratio began to decline from February 2022 onwards, reaching its lowest point in August 2023. This downward trend suggests potential concerns regarding the company's capacity to meet its interest payments with its earnings.
Furthermore, the interest coverage ratio falling below 1 in some periods (February 2023 to August 2024) implies that CarMax Inc may have had difficulty generating enough operating income to cover its interest expenses during those times. A sustained interest coverage ratio below 1 is generally a red flag for investors and creditors, as it indicates a heightened risk of default on debt obligations.
Overall, the trend in CarMax Inc's interest coverage ratio highlights the importance of closely monitoring the company's financial performance and debt management practices to ensure its long-term stability and solvency.