CarMax Inc (KMX)

Solvency ratios

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 Feb 29, 2020 Nov 30, 2019 Aug 31, 2019 May 31, 2019
Debt-to-assets ratio 0.06 0.06 0.06 0.07 0.07 0.07 0.09 0.10 0.12 0.10 0.09 0.06 0.06 0.06 0.09 0.08 0.08 0.08 0.08 0.08
Debt-to-capital ratio 0.21 0.21 0.21 0.25 0.25 0.26 0.32 0.32 0.38 0.34 0.31 0.22 0.23 0.24 0.32 0.32 0.32 0.32 0.32 0.31
Debt-to-equity ratio 0.26 0.27 0.27 0.33 0.34 0.35 0.46 0.48 0.62 0.51 0.45 0.28 0.30 0.32 0.48 0.47 0.47 0.46 0.47 0.46
Financial leverage ratio 4.48 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 5.59 5.54 5.58 5.71

CarMax Inc's solvency ratios provide insights into the company's ability to meet its long-term financial obligations and the extent of its leverage.

The Debt-to-Assets ratio has remained relatively stable around 0.06 to 0.12 over the periods analyzed, indicating that CarMax has maintained a low level of debt compared to its total assets. This suggests a conservative approach to financing its operations.

The Debt-to-Capital ratio has also shown consistency, hovering around 0.21 to 0.38. This ratio reflects the proportion of the company's capital structure that is attributable to debt, with CarMax maintaining a moderate level of debt within its capital mix.

The Debt-to-Equity ratio demonstrates the extent to which CarMax relies on debt financing compared to equity. It shows a slightly increasing trend from 0.26 to 0.62 over the periods, indicating a gradual buildup of leverage. However, the ratios are still within a reasonable range, suggesting that the company has not overly relied on debt to finance its operations.

Finally, the Financial Leverage ratio, which measures the company's total assets relative to its equity, has shown some fluctuations but generally remained around 4.5 to 5.7. This indicates that CarMax has maintained a relatively stable level of financial leverage, with assets financed by a combination of equity and debt.

Overall, the solvency ratios suggest that CarMax Inc has managed its debt levels prudently, maintaining a healthy balance between debt and equity in its capital structure. However, monitoring the trend in these ratios is crucial to ensure the company's long-term financial stability and risk management.

Coverage ratios

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 Feb 29, 2020 Nov 30, 2019 Aug 31, 2019 May 31, 2019
Interest coverage 6.14 6.40 5.95 5.98 6.29 7.37 10.42 13.33 16.86 18.75 19.23 19.47 12.20 12.11 10.90 10.13 14.99 14.96 15.75 16.15

CarMax Inc's interest coverage ratio has shown a generally positive trend over the past 20 quarters, indicating the company's ability to comfortably meet its interest obligations. The ratio has consistently been above 1, which suggests that CarMax earns enough operating income to cover its interest expenses.

From February 2019 to November 2021, the interest coverage ratio remained above 10, indicating a strong ability to cover interest expenses. However, there was a slight decrease in the ratio from November 2021 to February 2022, but it remained above 5.

Overall, CarMax Inc's interest coverage ratio has demonstrated stability and strength, with some fluctuations but maintaining a healthy level above 5, which is generally considered favorable in terms of financial health and ability to service debt obligations. It is important to note that a higher interest coverage ratio indicates a lower risk of financial distress due to an inability to meet interest payments.