RH (RH)
Solvency ratios
| Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.01 | 0.01 |
| Debt-to-capital ratio | — | 0.02 | 0.00 | 0.03 | 0.62 |
| Debt-to-equity ratio | — | 0.02 | 0.00 | 0.03 | 1.66 |
| Financial leverage ratio | — | 6.77 | 4.73 | 6.48 | 131.13 |
RH has maintained a consistently low debt-to-assets ratio over the past five years, with the ratio being at 0.00 for the last three fiscal years. This indicates that the company has very little debt relative to its total assets, portraying a strong financial position regarding solvency and ability to meet its obligations.
The debt-to-capital ratio has shown significant fluctuations, ranging from 0.00 to 0.62 over the same period. The ratio for the most recent fiscal year is not provided, indicating potential changes or omissions in the data. The trend suggests varying levels of debt relative to the total capital structure, which may indicate changes in the company's financing strategy or capital management.
Similarly, the debt-to-equity ratio has remained low, with the ratio at 0.00 for the last three years. This ratio reflects the company's proportion of debt to equity, and RH's consistent low ratio indicates a stable capital structure with a low reliance on debt for funding its operations.
The financial leverage ratio has shown significant variation, ranging from 4.73 to 131.13 over the five-year period. This ratio demonstrates the extent to which the company utilizes debt to finance its assets. The notable fluctuations in this ratio highlight potential shifts in the company's capital structure and financial risk profile over the years.
Overall, RH's solvency ratios indicate a strong financial position with minimal debt relative to assets, capital, and equity. However, the fluctuations in the debt-to-capital and financial leverage ratios suggest changes in the company's financing decisions and leverage levels, warranting further analysis to understand the underlying factors driving these variations.
Coverage ratios
| Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 1.65 | 3.63 | 13.66 | 6.44 | 4.09 |
Interest coverage ratio measures a company's ability to meet its interest payments on outstanding debt. A higher interest coverage ratio indicates that a company is more capable of servicing its debt obligations.
Analyzing the trend in RH's interest coverage ratio over the past five years, we observe a fluctuating pattern. In February 2024, the interest coverage ratio stands at 1.65, which indicates that RH's ability to cover its interest expenses has decreased compared to the previous year. This suggests that the company may be facing challenges in meeting its interest obligations from its earnings.
Comparing this to the ratios from the previous years, we note a significant decline from the high of 13.66 in January 2022, signaling a notable deterioration in RH's ability to cover its interest payments. While the ratios in 2023 and 2024 indicate a weaker interest coverage, they still remain above 1, suggesting that RH is generating enough earnings to cover its interest expenses, albeit with less margin of safety.
Overall, the decreasing trend in RH's interest coverage ratio raises concerns about the company's financial health and its ability to meet its debt obligations comfortably. Further analysis of the underlying factors contributing to this decline would be crucial in assessing the company's financial stability and sustainability.