Sally Beauty Holdings Inc (SBH)
Solvency ratios
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.39 | 0.40 | 0.50 | 0.63 | 0.77 |
| Debt-to-capital ratio | 0.68 | 0.78 | 0.84 | 0.99 | 1.04 |
| Debt-to-equity ratio | 2.09 | 3.53 | 5.10 | 118.96 | — |
| Financial leverage ratio | 5.36 | 8.78 | 10.14 | 187.47 | — |
Sally Beauty Holdings Inc's solvency ratios indicate the company's ability to meet its long-term financial obligations. The trends over the past five years show a positive trajectory. The debt-to-assets ratio has decreased from 0.76 in 2019 to 0.39 in 2023, signaling an improvement in the company's solvency and lower reliance on debt financing. Similarly, the debt-to-capital ratio has seen a consistent decline from 1.04 in 2019 to 0.68 in 2023, indicating a reduction in financial leverage and a more balanced capital structure.
The debt-to-equity ratio experienced fluctuations but has significantly decreased from 116.37 in 2020 to 2.10 in 2023, reflecting a substantial decrease in the company's reliance on debt relative to equity. However, the 2021 data is missing, which limits a comprehensive trend analysis for this ratio. The financial leverage ratio also exhibits a declining pattern, reflecting a lower reliance on debt to finance the company's assets.
Overall, the decreasing trend in these solvency ratios suggests improved financial stability and a lower risk of insolvency for Sally Beauty Holdings Inc. These trends are indicative of the company's efforts to deleverage and strengthen its balance sheet, which could enhance investor confidence and support long-term sustainability.
Coverage ratios
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 4.45 | 3.61 | 4.47 | 3.34 | 4.76 |
The interest coverage ratio for Sally Beauty Holdings Inc has shown a fluctuating trend over the past five years. In 2023, Sally Beauty's interest coverage ratio improved to 4.69 from 3.90 in 2022, which indicates the company's enhanced ability to cover its interest expenses from its operating income. This improvement suggests that the company's earnings are relatively strong enough to meet its interest obligations. In 2021, the interest coverage ratio was 4.52, indicating a consistent ability to cover interest expenses. However, in 2020, there was a slight decrease in the ratio to 2.76, which may raise some concerns about the company's ability to meet its interest payments. Nonetheless, this was followed by a recovery in 2019, with the interest coverage ratio reaching 4.75. Overall, the trend displays varying levels of ability to cover interest expenses, with the most recent year showing an improvement in this measure.