Kroger Company (KR)

The solvency ratios of Kroger Company indicate the company's ability to meet its long-term financial obligations and manage its debt levels effectively.

1. Debt-to-assets ratio: This ratio has remained relatively stable over the past five years, ranging from 0.20 to 0.25. A lower debt-to-assets ratio suggests that Kroger relies less on external funding to finance its assets, indicating a strong financial position.

2. Debt-to-capital ratio: This ratio has shown a decreasing trend over the years, indicating that Kroger has reduced its reliance on debt and increased its equity financing. A lower debt-to-capital ratio signifies better financial health and a lower risk of insolvency.

3. Debt-to-equity ratio: The decreasing trend in this ratio from 1.32 in 2020 to 0.87 in 2024 indicates that Kroger has been reducing its debt levels in relation to equity. A lower debt-to-equity ratio signifies that the company is less leveraged and has a stronger equity base to cushion against financial shocks.

4. Financial leverage ratio: This ratio has fluctuated slightly over the years but shows a general decreasing trend from 5.26 in 2020 to 4.35 in 2024. A lower financial leverage ratio suggests that Kroger relies less on debt financing to generate returns for shareholders, indicating a healthier financial position.

Overall, the solvency ratios of Kroger Company demonstrate a positive trend towards reducing debt levels and improving financial stability, which is essential for long-term sustainability and growth.

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Coverage ratios

The interest coverage ratio for Kroger Company has shown fluctuations over the past five years. In the most recent fiscal year ending on February 3, 2024, the interest coverage ratio improved to 7.42 compared to the prior year's ratio of 6.41. This signifies that Kroger's ability to cover its interest expenses with operating earnings has strengthened.

Looking back over the five-year period, there have been fluctuations in the interest coverage ratio. In FY 2021, the ratio was relatively high at 7.19, indicating a strong ability to meet interest obligations. In contrast, FY 2020 had a lower interest coverage ratio of 4.53, suggesting relatively weaker coverage of interest expenses with operating earnings.

Overall, the trend in Kroger Company's interest coverage ratio reflects some variability, but the recent improvement in FY 2024 indicates a positive development in the company's ability to meet its interest obligations from its operational earnings.