Dave & Buster’s Entertainment (PLAY)

Dave & Buster’s Entertainment solvency ratios indicate the company's ability to meet its long-term financial obligations. The debt-to-assets ratio has been increasing over the past five years, suggesting a higher proportion of assets financed by debt. This may indicate increased leverage in the company's capital structure.

The debt-to-capital ratio and debt-to-equity ratio have also shown an upward trend, indicating a higher reliance on debt to fund its operations and expansion. The debt-to-equity ratio, in particular, has increased significantly, reflecting a higher level of financial risk as compared to equity financing.

The financial leverage ratio, which measures the proportion of total assets financed by debt, has also been on the rise. A higher financial leverage ratio implies greater financial risk and reliance on debt to fund the company's operations.

Overall, these solvency ratios suggest that Dave & Buster’s Entertainment has been increasingly leveraging its capital structure with a higher proportion of debt. This may allow the company to take advantage of growth opportunities but also exposes it to higher financial risk in case of economic downturns or difficulties in debt servicing.

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Coverage ratios

Dave & Buster’s Entertainment's interest coverage ratio has fluctuated over the past five years. In the most recent fiscal year ending on Feb 4, 2024, the company had an interest coverage ratio of 2.41, indicating that the company generated operating income 2.41 times greater than its interest expenses. This ratio decreased compared to the previous year, where it stood at 3.00 on Jan 29, 2023, and also below the ratios in fiscal years 2022 and 2020.

The interest coverage ratio of Dave & Buster’s was negative in the fiscal year ending Jan 31, 2021, at -6.87. A negative ratio suggests that the company's operating income was insufficient to cover its interest expenses during that period, which could be a cause for concern. However, it is worth noting that the company improved significantly in the following fiscal year, reaching a healthy interest coverage ratio of 7.07 on Feb 2, 2020.

Overall, while the recent interest coverage ratio of 2.41 is a decrease from the previous year, it is essential for Dave & Buster’s to monitor and manage its interest expenses to ensure that the company can comfortably meet its debt obligations with operating income in the future.