Vista Outdoor Inc (VSTO)
Solvency ratios
| Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.30 | 0.35 | 0.28 | 0.28 | 0.37 |
| Debt-to-capital ratio | 0.39 | 0.47 | 0.37 | 0.40 | 0.54 |
| Debt-to-equity ratio | 0.64 | 0.87 | 0.59 | 0.67 | 1.16 |
| Financial leverage ratio | 2.13 | 2.47 | 2.13 | 2.39 | 3.15 |
The solvency ratios of Vista Outdoor Inc show a consistent improvement in their financial leverage and debt management over the past five years. The debt-to-assets ratio decreased from 0.37 in 2020 to 0.30 in 2024, indicating that the company has reduced its reliance on debt to finance its assets. The debt-to-capital ratio also improved from 0.54 in 2020 to 0.39 in 2024, showing that Vista Outdoor has lowered its debt financing in relation to its total capital.
Furthermore, the debt-to-equity ratio declined from 1.16 in 2020 to 0.64 in 2024, signaling that the company has decreased its debt burden relative to equity funding. The financial leverage ratio also exhibited a downward trend from 3.15 in 2020 to 2.13 in 2024, indicating that Vista Outdoor has become more efficient in using debt to generate returns for shareholders.
Overall, the solvency ratios of Vista Outdoor Inc demonstrate significant progress in managing its debt levels and improving its financial structure, which may enhance its long-term financial sustainability and reduce its financial risks.
Coverage ratios
| Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | |
|---|---|---|---|---|---|
| Interest coverage | 5.00 | 16.09 | 25.58 | 11.40 | -3.40 |
Vista Outdoor Inc's interest coverage ratio has varied over the past five years, showing both strengths and weaknesses in managing its interest payments.
In the most recent year as of March 31, 2024, the interest coverage ratio stands at 5.00. This indicates that the company's operating income is able to cover its interest expenses 5 times over. This suggests a moderate level of financial health, as the company is generating sufficient operating income to comfortably meet its interest obligations.
Looking back over the previous years, Vista Outdoor Inc demonstrated a strong interest coverage ratio of 16.09 in March 2023 and 25.58 in March 2022, indicating robust financial performance and the ability to easily meet interest payments. However, there was a decline in the interest coverage ratio in March 2021 to 11.40, which while still healthy, showed a slight decrease in the company's ability to cover interest expenses.
The most notable concern arises from the interest coverage ratio of -3.40 in March 2020. A negative interest coverage ratio indicates that the company's operating income was insufficient to cover its interest expenses, signaling financial distress and a potential inability to meet debt obligations from operating income alone.
Overall, while Vista Outdoor Inc has shown fluctuations in its interest coverage ratio over the years, the recent positive trend suggests a reasonable ability to manage interest payments. However, the negative ratio in 2020 serves as a reminder of the importance of consistently monitoring and improving financial performance to ensure sustainable operations.