Kohls Corp (KSS)

Solvency ratios

Feb 3, 2024 Jan 28, 2023 Jan 29, 2022 Jan 30, 2021 Feb 1, 2020
Debt-to-assets ratio 0.12 0.11 0.13 0.16 0.13
Debt-to-capital ratio 0.30 0.30 0.29 0.32 0.25
Debt-to-equity ratio 0.42 0.44 0.41 0.47 0.34
Financial leverage ratio 3.60 3.81 3.23 2.95 2.67

Based on the solvency ratios for Kohls Corp over the past five years, we can observe the following trends:

1. Debt-to-assets ratio: This ratio measures the proportion of the company's assets financed by debt. Kohls Corp has maintained a relatively stable debt-to-assets ratio, ranging from 0.11 in 2023 to 0.16 in 2021. The lower the ratio, the lower the financial risk associated with the company's capital structure.

2. Debt-to-capital ratio: This ratio indicates the percentage of the company's capital that is financed by debt. Kohls Corp has consistently maintained a debt-to-capital ratio around 0.30 over the past three years, with a slight increase to 0.32 in 2021. A stable debt-to-capital ratio suggests a balanced mix of debt and equity in the company's capital structure.

3. Debt-to-equity ratio: The debt-to-equity ratio shows the proportion of the company's financing that comes from debt relative to equity. Kohls Corp has shown a slight fluctuation in this ratio, ranging from 0.34 in 2020 to 0.47 in 2021. A lower debt-to-equity ratio indicates less reliance on debt financing, which can be favorable for long-term financial stability.

4. Financial leverage ratio: This ratio measures the extent to which a company uses debt to finance its operations. Kohls Corp's financial leverage ratio has shown an increasing trend over the past five years, from 2.67 in 2020 to 3.60 in 2024. A higher financial leverage ratio may indicate a higher level of financial risk due to increased debt levels.

Overall, Kohls Corp's solvency ratios suggest a relatively stable and balanced capital structure, with a moderate level of debt financing. The company has managed its debt levels effectively, as evidenced by the consistent ratios over the years, although the increasing financial leverage ratio warrants attention to ensure sustainable financial health.


Coverage ratios

Feb 3, 2024 Jan 28, 2023 Jan 29, 2022 Jan 30, 2021 Feb 1, 2020
Interest coverage 4.98 1.76 15.14 -2.57 11.21

The interest coverage ratio for Kohls Corp has shown fluctuations over the past five years. In particular:

- In February 2024, the interest coverage ratio was 4.98, indicating that the company's earnings before interest and taxes (EBIT) were able to cover its interest expense nearly five times over. This is a positive sign of the company's ability to meet its interest obligations.

- In January 2023, the interest coverage ratio decreased to 1.76, reflecting a decline in the company's ability to cover its interest expenses with its earnings. This could raise concerns about the company's financial health and ability to service its debt.

- January 2022 saw a significant improvement in the interest coverage ratio to 15.14, indicating a strong ability to cover interest payments with operating profits. This high ratio suggests a healthy financial position and low risk of default.

- However, January 2021 recorded a concerning interest coverage ratio of -2.57, indicating that the company's EBIT was insufficient to cover its interest expenses. This negative ratio is a red flag for investors and creditors as it suggests a high risk of default on debt repayments.

- By February 2020, the interest coverage ratio had recovered to a more favorable level of 11.21, suggesting a strong ability to cover interest payments with earnings.

Overall, fluctuations in Kohls Corp's interest coverage ratio over the five-year period indicate varying levels of financial performance and risk. Investors and stakeholders should closely monitor this ratio to assess the company's ability to meet its interest obligations in the future.