Leslies Inc (LESL)
Solvency ratios
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | |
|---|---|---|---|
| Debt-to-assets ratio | 0.75 | 0.70 | 0.75 |
| Debt-to-capital ratio | 1.26 | 1.34 | 1.38 |
| Debt-to-equity ratio | — | — | — |
| Financial leverage ratio | — | — | — |
The debt-to-assets ratio for Leslies Inc increased from 0.70 in 2022 to 0.75 in 2023. This indicates that 75% of the company's total assets are financed by debt. The increase in this ratio suggests a higher reliance on debt to fund the company's operations and growth.
The debt-to-capital ratio decreased from 1.34 in 2022 to 1.26 in 2023. This ratio measures the proportion of a company's capital that is financed by debt. The decline in this ratio indicates a lower proportion of the company's capital being derived from debt sources compared to the previous year.
The debt-to-equity ratio and financial leverage ratio data are not provided for the years 2021, 2022, and 2023, making it challenging to analyze the company's debts relative to its equity and the impact of leverage on its financial position.
Overall, the increasing debt-to-assets ratio and decreasing debt-to-capital ratio for Leslies Inc suggest a mixed trend in solvency ratios, with a heightened reliance on debt financing to support the company's assets and capital structure in the latest fiscal year.
Coverage ratios
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | |
|---|---|---|---|
| Interest coverage | 1.56 | 7.88 | 5.74 |
Interest coverage measures a company's ability to pay its interest expenses on outstanding debt. A higher interest coverage ratio indicates better financial health and ability to cover interest obligations.
Leslies Inc's interest coverage ratio has decreased significantly from 2022 to 2023, dropping from 7.88 to 1.56. This could imply that the company's ability to cover its interest expenses with operating income has weakened over the year.
In 2021, the interest coverage ratio was 5.74, showing a relatively strong ability to meet interest payments compared to the most recent figures.
The substantial decrease in interest coverage from 2022 to 2023 may raise concerns about Leslies Inc's financial health and capacity to service its debt obligations with its current level of operating income. Further analysis of the company's financial statements and potential reasons for the decline in interest coverage would be important to understand the underlying factors contributing to this trend.