CarMax Inc (KMX)
Solvency ratios
| 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 | Feb 29, 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 | 4.42 | 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 | 5.59 |
CarMax Inc's solvency ratios indicate a strong financial position with consistently low debt levels relative to its assets, capital, and equity over the analyzed period. The Debt-to-assets ratio, Debt-to-capital ratio, and Debt-to-equity ratio remained at 0.00 throughout the period, highlighting the company's minimal reliance on external borrowing to finance its operations.
The Financial leverage ratio, which measures the proportion of a company's assets that are financed by debt compared to equity, decreased gradually from 5.59 in February 2020 to 4.39 in November 2024. This downward trend suggests that the company has been steadily reducing its reliance on debt financing over the years, enhancing its long-term solvency and financial stability.
Overall, CarMax Inc's solvency ratios demonstrate a conservative approach to managing its capital structure, with a focus on maintaining low levels of debt in relation to its assets and equity. This solid financial position bodes well for the company's ability to weather economic downturns and pursue future growth opportunities without being heavily burdened by debt obligations.
Coverage ratios
| 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 | Feb 29, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 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 | 4.69 |
CarMax Inc's interest coverage ratio has shown fluctuations over the period from February 2020 to November 2024. The interest coverage ratio measures the company's ability to meet its interest obligations on its outstanding debt. A higher interest coverage ratio indicates that the company is more capable of meeting its interest payments.
From February 2020 to May 2021, CarMax Inc's interest coverage ratio improved steadily from 4.69 to 6.53, and then further increased to 7.84 by November 2021, showcasing a strong ability to cover its interest expenses. However, starting from February 2022, the interest coverage ratio began to decline, dropping to 0.92 by February 2024. This downward trend suggests a decrease in the company's ability to cover its interest payments.
The decreasing trend in the interest coverage ratio from February 2022 to November 2024 could raise concerns about CarMax Inc's financial health and its ability to meet its debt obligations. Investors and creditors may closely monitor this ratio to assess the company's financial stability and ability to manage its debt effectively.