Victoria's Secret & Co (VSCO)

Victoria's Secret & Co's solvency ratios demonstrate a strong financial position with consistently low debt levels relative to assets, capital, and equity.

- Debt-to-assets ratio shows a downward trend over time, reaching 0.00 by January 31, 2024, indicating that the company's assets are largely financed through equity rather than debt. However, there was a slight increase to 0.24 by February 3, 2024, likely due to increased borrowing for strategic purposes.

- Debt-to-capital ratio also exhibits a similar pattern, decreasing to 0.00 by January 31, 2024, suggesting that the company's capital structure relies more on equity than debt. The ratio rises slightly to 0.73 by February 3, 2024, reflecting a temporary increase in debt compared to capital.

- Debt-to-equity ratio follows a consistent decline, reaching 0.00 by January 31, 2024, showing that the company's equity is more significant than its debt obligations. The ratio rises to 2.69 by February 3, 2024, but still remains relatively low, indicating a manageable level of debt in relation to equity.

- The financial leverage ratio demonstrates a declining trend, decreasing from 12.30 on January 28, 2023, to 10.00 by January 31, 2025. This indicates a reduction in the company's reliance on debt financing over time, leading to a stronger financial position and reduced financial risk.

Overall, Victoria's Secret & Co exhibits a healthy solvency position with low levels of debt relative to its assets, capital, and equity, as evidenced by the consistent downward trend in its solvency ratios over the analyzed period.

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Coverage ratios

The interest coverage ratio for Victoria's Secret & Co has shown a declining trend from January 28, 2023, at 8.12 to January 31, 2025, at 3.59. This indicates that the company's ability to cover its interest expenses with its earnings has weakened over the years. The ratio dropped significantly from 7.95 on January 31, 2023, to 2.48 on January 31, 2024, and further decreased to 2.41 by February 3, 2024. A lower interest coverage ratio suggests that the company may be facing challenges in meeting its interest obligations from operating profits alone. It is essential for investors and creditors to closely monitor this trend as it signifies the company's financial health and its ability to service its debt obligations in the long term.