Victoria's Secret & Co (VSCO)

Victoria's Secret & Co's solvency ratios provide insight into the company's ability to meet its long-term financial obligations and manage its debt effectively. The debt-to-assets ratio has shown a decreasing trend over the past three years, indicating that the company has been able to reduce its reliance on debt to finance its assets. This suggests a healthier balance between debt and assets.

The debt-to-capital and debt-to-equity ratios have also declined over the same period, showing a decreasing level of financial risk as the company has reduced its debt relative to its capital and equity. This could be a positive sign for investors and creditors as it indicates improved financial stability and lower exposure to debt-related risks.

The financial leverage ratio, which measures total assets relative to shareholders' equity, has also decreased over the years. This indicates that the company has been able to fund its assets more through equity rather than debt, which can be seen as a positive sign of financial health.

Overall, based on these solvency ratios, Victoria's Secret & Co appears to have improved its solvency position by reducing its reliance on debt and managing its financial leverage effectively over the past three years. However, it would be beneficial to continue monitoring these ratios in the future to ensure sustainable financial health.

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Coverage ratios

The interest coverage ratio for Victoria's Secret & Co has shown a declining trend over the past three years. In fiscal year 2022, the company had a notably high interest coverage ratio of 32.22, indicating a strong ability to cover its interest expenses with operating income. However, this ratio decreased significantly to 8.12 in fiscal year 2023 and further to 2.41 in fiscal year 2024.

A declining interest coverage ratio may suggest that Victoria's Secret & Co may be facing challenges in generating sufficient operating income to cover its interest expenses. This could potentially indicate an increased risk of default on debt obligations in the future if the trend continues. It is essential for the company to closely monitor its interest coverage ratio and take appropriate measures to improve its financial performance and ensure sustainability in meeting its debt obligations.