Ralph Lauren Corp Class A (RL)

The solvency ratios of Ralph Lauren Corp Class A indicate its ability to meet its financial obligations and sustain long-term financial viability.

The Debt-to-assets ratio has remained relatively stable over the past five years, ranging from 0.05 in 2020 to 0.21 in 2021, but has since decreased to 0.17 in 2024. This suggests that the company has a low level of debt in relation to its total assets, which is generally considered favorable for solvency.

The Debt-to-capital ratio also shows consistency within a narrow range, with values ranging from 0.13 to 0.39. A lower ratio indicates less reliance on debt financing, which could be seen as a positive indicator of financial health.

The Debt-to-equity ratio has fluctuated over the years but has generally decreased from 0.63 in 2021 to 0.47 in 2024. This ratio measures the proportion of equity and debt used to finance the company's assets, with a lower ratio indicating a higher proportion of equity, which can be beneficial for solvency.

The Financial leverage ratio has shown fluctuations over the years, ranging from 2.70 to 3.05. A higher financial leverage ratio suggests a greater reliance on debt to finance the company’s assets, potentially increasing financial risk.

Overall, the analysis of solvency ratios for Ralph Lauren Corp Class A indicates a stable and relatively low level of indebtedness compared to its assets and equity. However, fluctuations in the financial leverage ratio highlight the importance of monitoring the company's debt management strategies to ensure long-term solvency and financial stability.

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Coverage ratios

Interest coverage ratio measures a company's ability to pay its interest expenses on outstanding debt. Ralph Lauren Corp Class A has exhibited fluctuating interest coverage ratios over the past five years. The interest coverage ratio was significantly positive and stable in the fiscal years ending in March 2020, 2021, and 2023, with values of 19.55, -0.54, and 18.13, respectively, indicating a strong ability to cover interest expenses with operating income.

However, there was a notable decline in the interest coverage ratio in the fiscal year ending in March 2022 to 14.97, which may suggest a decrease in the company's ability to cover interest expenses comfortably. It is essential to investigate the reasons behind this decrease further to assess any potential risks to the company's financial stability.

The interest coverage ratio rebounded in the most recent fiscal year ending in March 2024 to 19.42, showing a positive trend. This improvement indicates the company's enhanced ability to meet its interest obligations using its operating income.

Overall, while the interest coverage ratio of Ralph Lauren Corp Class A has been somewhat inconsistent over the past five years, the recent improvement suggests a positive turn in the company's ability to manage its interest expenses effectively. Monitoring this ratio over time will be crucial to ensure the company's financial health and sustainability.