Sally Beauty Holdings Inc (SBH)
Solvency ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.39 | 0.39 | 0.40 | 0.40 | 0.40 | 0.40 | 0.39 | 0.51 | 0.50 | 0.50 | 0.52 | 0.57 | 0.62 | 0.63 | 0.57 | 0.46 | 0.61 | 0.77 | 0.77 | 0.82 |
| Debt-to-capital ratio | 0.67 | 0.68 | 0.69 | 0.71 | 0.74 | 0.78 | 0.78 | 0.84 | 0.84 | 0.84 | 0.87 | 0.92 | 0.95 | 0.99 | 1.04 | 1.04 | 1.00 | 1.04 | 1.05 | 1.09 |
| Debt-to-equity ratio | 1.99 | 2.09 | 2.19 | 2.50 | 2.83 | 3.53 | 3.52 | 5.17 | 5.06 | 5.10 | 6.49 | 12.28 | 18.88 | 118.96 | — | — | 738.50 | — | — | — |
| Financial leverage ratio | 5.05 | 5.36 | 5.49 | 6.28 | 7.15 | 8.78 | 9.08 | 10.09 | 10.16 | 10.14 | 12.50 | 21.58 | 30.34 | 187.47 | — | — | 1,216.49 | — | — | — |
Sally Beauty Holdings Inc's solvency ratios indicate the company's ability to meet its long-term financial obligations. The debt-to-assets ratio has been relatively stable over the past eight quarters, hovering between 0.39 and 0.50. This suggests that around 39% to 50% of the company's assets are financed by debt.
The debt-to-capital ratio has shown a slight increase from 0.66 to 0.84 over the same period, indicating that debt accounts for approximately 66% to 84% of the company's capital structure. This may suggest an increase in reliance on debt financing compared to other sources of capital.
The debt-to-equity ratio has exhibited a significant upward trend, rising from 1.98 to 5.08 over the past two years. This indicates that the company's debt level is increasing in relation to its equity, implying higher financial risk and leverage.
The financial leverage ratio has also been steadily increasing, reaching 10.09 in Q2 2022 from 5.05 in Q1 2023. This shows that the company's financial leverage has been rising, indicating a higher proportion of debt in its capital structure compared to equity.
Overall, Sally Beauty Holdings Inc's solvency ratios suggest a growing reliance on debt financing to support its operations, which may increase financial risk and impact the company's ability to meet its debt obligations in the long term. Investors and stakeholders should closely monitor these ratios to assess the company's financial health and sustainability.
Coverage ratios
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 4.25 | 4.45 | 4.06 | 3.37 | 3.41 | 3.61 | 4.25 | 5.23 | 4.86 | 4.47 | 4.20 | 2.85 | 2.60 | 2.62 | 2.75 | 4.10 | 4.75 | 4.76 | 4.52 | 4.40 |
The interest coverage ratio for Sally Beauty Holdings Inc has shown a relatively stable trend over the past eight quarters, ranging from a low of 3.82 in Q1 2023 to a high of 5.28 in Q2 2022. The ratio indicates the company's ability to meet its interest obligations with its operating income, with a higher ratio suggesting stronger financial health and a lower risk of default.
The average interest coverage ratio over the period is approximately 4.37, indicating that the company, on average, generates operating income more than four times its interest expense. This signifies a comfortable buffer to cover interest payments and implies lower financial risk for creditors.
It is noteworthy that the interest coverage ratio has been consistently above 3.0, which is typically considered a minimum acceptable level by creditors to ensure financial stability. However, a fluctuating trend in the ratio over time may warrant further investigation into the company's financial management and operational efficiency to maintain sustainable interest coverage in the future.