Unifirst Corporation (UNF)

Based on the solvency ratios of Unifirst Corporation as of the latest fiscal year ended August 31, 2024, the company demonstrated a consistent trend of maintaining a debt-free capital structure, as indicated by a debt-to-assets ratio, debt-to-capital ratio, and debt-to-equity ratio of 0.00 for five consecutive years. This signifies that the company has financed its operations primarily through equity rather than debt.

Furthermore, the financial leverage ratio, which measures the extent to which the company relies on debt financing, showed a slight increase from 1.26 in August 2020 to 1.28 in August 2024. While this increase suggests a marginal rise in financial leverage, the ratio remains relatively low, indicating that the company's overall financial risk is modest and manageable.

In summary, Unifirst Corporation's solvency ratios reflect a conservative approach to capital structure management, with a prudent avoidance of excessive debt levels. The stable and low debt ratios indicate a strong financial position and the ability to meet its financial obligations effectively.

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Coverage ratios

The interest coverage ratio of Unifirst Corporation has shown significant fluctuations over the past five years. In 2020, the interest coverage was 33.48, indicating that the company's operating income was 33.48 times higher than its interest expenses. This ratio improved in 2021 to 187.21, signaling a substantial increase in the company's ability to cover its interest payments. However, in 2022, the interest coverage ratio dropped to 47.12, suggesting a decline in the company's ability to cover its interest expenses compared to the previous year. Unfortunately, there is no data available for 2023 and 2024, making it difficult to assess the trend in recent years. Overall, fluctuations in the interest coverage ratio may indicate changes in the company's profitability and financial stability, warranting further investigation into Unifirst Corporation's financial health.