Dave & Buster’s Entertainment (PLAY)

Debt-to-capital ratio

		Feb 4, 2024	Oct 29, 2023	Jul 30, 2023	Apr 30, 2023	Jan 29, 2023	Oct 30, 2022	Jul 31, 2022	May 1, 2022	Jan 30, 2022	Oct 31, 2021	Aug 1, 2021	May 2, 2021	Jan 31, 2021	Nov 1, 2020	Aug 2, 2020	May 3, 2020	Feb 2, 2020	Nov 3, 2019	Aug 4, 2019	May 5, 2019
Long-term debt	US$ in thousands	1,284,000	1,281,300	1,278,700	1,221,100	1,222,700	1,222,210	1,219,680	431,966	431,395	484,677	537,816	537,102	596,388	561,815	731,646	735,261	632,689	640,384	552,079	427,774
Total stockholders’ equity	US$ in thousands	251,200	211,600	314,400	359,900	410,500	361,000	356,400	351,800	275,500	246,559	229,875	178,642	153,232	206,774	250,371	192,635	169,650	148,121	249,302	360,125
Debt-to-capital ratio		0.84	0.86	0.80	0.77	0.75	0.77	0.77	0.55	0.61	0.66	0.70	0.75	0.80	0.73	0.75	0.79	0.79	0.81	0.69	0.54

February 4, 2024 calculation

Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $1,284,000K ÷ ($1,284,000K + $251,200K)
= 0.84

The debt-to-capital ratio of Dave & Buster’s Entertainment has shown fluctuations over the past few periods. It increased from 0.54 in May 2019 to a peak of 0.86 in October 2023, indicating a higher proportion of debt financing relative to total capital during this period. Subsequently, the ratio decreased to 0.55 in May 2022 but then increased again to 0.84 by February 2024.

The company's debt-to-capital ratio has generally been on the higher side, ranging from 0.61 to 0.86 in the recent periods, suggesting a significant reliance on debt to finance its operations and growth initiatives. The ratio exceeding 0.5 indicates that more than half of the firm's capital structure is funded by debt rather than equity.

Investors and creditors often monitor the debt-to-capital ratio as a measure of the company's financial risk and leverage. A high debt-to-capital ratio can indicate higher financial risk, as the company may have higher interest expenses and debt repayment obligations. Conversely, a lower ratio may signify a more conservative capital structure.

It is important for stakeholders to assess this ratio in conjunction with other financial metrics and industry benchmarks to gain a comprehensive understanding of Dave & Buster’s financial health and risk profile.