Best Buy Co. Inc. (NYSE:BBY)

Debt to Equity

Over the analyzed periods, the debt to equity ratio generally remained below 0.5, indicating relatively low leverage. Some fluctuations are observed, such as a peak at 0.75 in May 2020, followed by a decline to around 0.3 in early 2021. In the most recent quarters, the ratio stayed between 0.39 and 0.43, reflecting moderate stability in equity financing relative to debt.

Debt to Equity (including Operating Lease Liability)

When incorporating operating lease liabilities, the debt to equity ratio is significantly higher, frequently surpassing 1.0 from May 2019 onward. There is a noticeable spike to 1.56 in May 2020, which suggests a temporary increase in lease-related obligations. Despite some volatility, values generally range between 1.3 and 1.4 in the latest quarters, indicating the material impact of lease liabilities on the company's leverage position.

Debt to Capital

This ratio mostly fluctuates between 0.2 and 0.3, showing relatively consistent capital structure leverage excluding lease liabilities. A distinct increase to 0.43 appears in May 2020, which aligns with the rise seen in other debt-related metrics during that quarter, before normalizing in subsequent periods.

Debt to Capital (including Operating Lease Liability)

Including operating leases, the debt to capital ratio approximately doubles from mid-2019 onward, moving between 0.5 and 0.6. The persistence of this higher range over time demonstrates the significant role operating leases play in the firm's capital structuring decisions.

Debt to Assets

The company's debt to assets ratio remains low, mostly under 0.1 across all periods. There is a brief rise to 0.16 in May 2020, coinciding with increased debt metrics at that time. The overall trend suggests modest financial risk related to asset-backed debt use.

Debt to Assets (including Operating Lease Liability)

When operating leases are considered, the ratio experiences a marked increase starting May 2019, moving from about 0.11 to a range roughly between 0.2 and 0.3. This again highlights the importance of lease obligations in evaluating asset financing risk.

Financial Leverage

An upward trend is observed in financial leverage, climbing from around 2.88 in early 2017 to above 5.0 in several quarters since late 2019. The ratio peaked near 5.8 in early 2022, indicative of increased total assets relative to equity and higher reliance on debt and liabilities in funding the company's operations.

Interest Coverage

The interest coverage ratio consistently shows strong ability to meet interest obligations, remaining well above 20 throughout the timeline. Starting from around 25 in 2017, it displays a notable upward trajectory from mid-2020 onward, reaching an exceptional level exceeding 120 by late 2021 and early 2022. This suggests significant improvements in earnings or reductions in interest expense, reflecting a highly comfortable interest payment capacity during the most recent periods reviewed.

Total Debt

The total debt displayed notable variability over the observed periods. Starting from a level around 1,347 million USD, there was a significant decrease to 848 million USD during mid-2018, followed by a rebound reaching 2,544 million USD in early 2020. Subsequently, debt levels generally decreased with fluctuations, ending at approximately 1,158 million USD in late 2022. These movements suggest periods of both debt reduction and increased borrowing, possibly reflecting strategic financing decisions or responses to market conditions.

Equity

Equity showed a downward trajectory in the initial two years, declining from roughly 4,499 million USD to a low near 3,012 million USD by late 2018. After this trough, equity began a recovery phase, peaking around 4,587 million USD in early 2021. However, following this peak, equity experienced a drop toward approximately 2,767 million USD mid-2022, with a mild recovery to about 2,993 million USD by the end of the period. This pattern indicates fluctuating retained earnings and potential impacts from issuance or repurchase of shares, or changes in accumulated comprehensive income.

Debt to Equity Ratio

The ratio of debt to equity demonstrated considerable fluctuations, aligning closely with the movements in total debt and equity levels. The ratio increased from 0.30 to a peak of 0.75 in early 2020, correlating with the substantial rise in total debt and a relative stabilization in equity. Following this peak, the ratio generally declined, remaining in the range between 0.29 and 0.43 in the later periods. This implies varying leverage levels, with a notable temporary increase in financial risk around early 2020, later moderated toward more conservative leverage positions.

Summary

The financial data indicates dynamic capital structure management, with significant debt accumulation early in 2020 contributing to temporary elevated leverage. Equity values reflected a recovery after mid-2018 declines but faced volatility in subsequent years. The debt to equity ratio mirrored these trends, suggesting that the company adjusted its financing approach in response to changing economic or operational conditions. Overall, there was a balance between debt and equity financing, with periods of higher risk appetite followed by strategic deleveraging.

The financial data over multiple quarters reveals notable fluctuations in the company’s debt, equity, and debt-to-equity ratio, indicating changes in capital structure and leveraging over time.

Total Debt (including operating lease liability)

The total debt demonstrates variability across the observed periods. Initially, debt levels were relatively stable, ranging roughly between 1,300 and 1,400 million USD through early 2018. A significant drop occurred in mid-2018, with debt declining to approximately 848 million USD, followed by an abrupt rise peaking above 4,000 million USD starting in early 2019. The elevated debt levels largely persisted through 2019 and early 2020. Subsequently, fluctuations were observed with a spike around mid-2020 reaching over 5,300 million USD, before reducing again below 4,100 million USD by early 2021. The latter quarters show a relatively stable debt level fluctuating around 4,000 million USD.

Equity

Equity exhibits a general declining trend from approximately 4,500 million USD in early 2017 down to a trough near 3,000 million USD by late 2019, with intermittent rebounds. A significant rebound in equity values is visible during 2020 and early 2021, reaching a peak around 4,500 million USD in early 2021. Subsequent periods show a moderate decline again to roughly 3,000 million USD towards the end of the data series. Overall, equity levels demonstrate volatility with an overall downward bias until early 2020 and some recovery thereafter, followed by renewed diminution.

Debt to Equity Ratio (including operating lease liability)

The debt-to-equity ratio mirrors the interplay between debt and equity levels. Initially, it remained low and stable between 0.3 and 0.4 until mid-2018. This was followed by a sharp increase starting in early 2019, with the ratio exceeding 1.0 and peaking near 1.56 mid-2020, indicative of increased leverage. After peaking, the ratio declined towards 0.89 to 0.95 range in early 2021, reflecting decreased relative debt or increased equity. However, from mid-2021 onward, the ratio rose again, fluctuating between approximately 1.3 and 1.4, suggesting a return to higher leverage levels by late 2022.

In summary, the company experienced a marked increase in total debt beginning in early 2019, with corresponding increases in financial leverage as reflected in the debt-to-equity ratio. Equity showed volatility, with notable recoveries and declines, impacting the capital structure. The debt-to-equity ratio highlights a period of heightened leverage particularly in 2019 and 2020, followed by temporary deleveraging, and a subsequent rebound in leverage in the latest periods. This pattern suggests the company underwent phases of increased borrowing relative to equity, potentially reflecting strategic financing decisions, operational needs, or market conditions influencing capital structure management.

Total Debt

The total debt demonstrates some fluctuation over the observed period. Initially, the debt remains relatively steady around the range of approximately 1300 to 1400 million USD. A notable decrease occurs in August 2018, with debt dropping to 848 million USD, followed by a rapid increase back above 1300 million USD. Subsequently, the debt remains somewhat volatile but generally stays near the 1200-1300 million USD range. A pronounced spike to 2544 million USD appears in May 2020, potentially indicating a significant financing event or increased borrowing. After this peak, the debt again stabilizes near previous levels, fluctuating slightly between 1100 and 1300 million USD toward the end of the period.

Total Capital

Total capital reveals a generally declining trend from the earliest period in April 2017 with a value near 5800 million USD, dropping steadily to a low near 4000 million USD by mid-2018. Thereafter, total capital exhibits an overall recovery with some volatility, rising back above 5900 million USD by May 2020, coinciding with the peak in total debt. Following this peak, total capital shows a moderate downward adjustment but remains above 4000 million USD through the end of the timeline. The movement suggests fluctuating capital structure dynamics possibly related to operational performance, market conditions, or capital management strategies.

Debt to Capital Ratio

The debt to capital ratio fluctuates between approximately 0.21 and 0.31 across most of the recorded quarters, reflecting a moderate and somewhat stable leverage position initially. There is a prominent increase to 0.43 in May 2020, which corresponds with the spike in total debt and total capital values at the same time, indicating a higher reliance on debt financing relative to capital during that quarter. Post May 2020, the ratio retreats to the 0.23 to 0.30 range, maintaining a moderately leveraged profile. Overall, the ratio suggests controlled leverage with temporary increases possibly linked to strategic financing activities or external conditions affecting capital structure.

The financial data reveals notable trends concerning the company's debt structure and capital over a series of quarterly periods.

Total Debt (Including Operating Lease Liability)

The total debt values fluctuated throughout the observed quarters. Initially, debt levels were relatively stable, ranging between approximately 1.3 billion to 1.4 billion USD from early 2017 to early 2018. A sharp decrease occurred in mid-2018, with the debt dropping to 848 million USD in August 2018. However, this decline was short-lived as debt levels surged to peak at over 4 billion USD by May 2019. Subsequently, during 2019 and early 2020, total debt remained around 4 billion to 5.3 billion USD, before showing variability from 2020 into early 2022. The most recent data points indicate fluctuations around the 4 billion USD level, with minor decreases toward the end of the period.

Total Capital (Including Operating Lease Liability)

Total capital demonstrated a declining trend from early 2017 through early 2018, dropping from about 5.8 billion USD to approximately 4.0 billion USD. From mid-2018 onwards, capital figures exhibited an upward trajectory, peaking around 8.7 billion USD in May 2020. Following this peak, capital levels generally remained elevated, fluctuating between roughly 6.7 billion to 8.6 billion USD through 2021 and into the beginning of 2022. These movements suggest periods of capital expansion interspersed with moderate declines.

Debt to Capital Ratio (Including Operating Lease Liability)

The debt to capital ratio followed a pattern that correlates with the changes in both debt and capital. Initially stable around 0.23-0.28 through early 2018, the ratio then showed a marked increase starting in mid-2018. It rose sharply from approximately 0.21 in August 2018 to reach levels of about 0.55 to 0.61 between 2019 and early 2020. After peaking near 0.61 in May 2020, the ratio slightly decreased but remained elevated, fluctuating roughly between 0.47 and 0.59 throughout 2021 and early 2022. This indicates a higher leverage position relative to capital during the latter part of the period analyzed.

Overall, the financial metrics suggest that the company underwent phases of increased borrowing and capital base expansion, leading to higher leverage ratios after mid-2018. The stabilization of these ratios at elevated levels indicates the company maintained a relatively high debt proportion in its capital structure toward the end of the examined timeframe.

Total Debt

Over the observed periods, total debt figures show a fluctuating pattern with notable variations. Initially, total debt remained relatively stable around 1,300 to 1,350 million USD until early 2018, followed by a significant decline in mid-2018 to approximately 848 million USD. Subsequently, the debt level rose again reaching a peak of 2,544 million USD in May 2020, which represents the highest recorded value within the period. Following this peak, total debt fluctuated without a clear upward or downward trend, ending around 1,158 million USD by October 2022. Overall, the data reveals episodic increases and decreases, with some volatility particularly evident around 2020.

Total Assets

Total assets presented notable growth and volatility throughout the timeline. Starting at around 12,955 million USD in early 2017, total assets experienced a steady increase, reaching approximately 15,000 million USD by late 2018. Despite some declines and fluctuations, the total assets surged significantly around October 2020, peaking at 21,202 million USD by the start of 2021. After this peak, total assets gradually trended downward but remained elevated relative to the earlier years, settling at approximately 17,021 million USD in late 2022. This indicates an overall expansion of asset base with intermittent volatility, particularly marked by the strong increase around 2020.

Debt to Assets Ratio

The debt to assets ratio maintained relatively low values throughout the period, predominantly ranging between 0.06 and 0.11. This suggests that the company consistently managed its leverage with a conservative approach. A notable exception occurred around May 2020, where the ratio spiked to 0.16, reflecting the peak in total debt coinciding with a simultaneous increase in total assets. Following this spike, the ratio quickly declined and stabilized near previous levels by the end of the period. The general trend indicates consistent leverage control with one temporary increase likely linked to extraordinary financial activity around 2020.

Overall Trends and Insights

The financial data shows that the company experienced periods of both stability and significant change. The peak in total debt and assets around mid-2020 coincides with an increased leverage ratio, suggesting possible strategic borrowing or investment during that time. Post-2020, total assets remained substantially higher than pre-2020 levels, indicating expansion or acquisition activities. Despite fluctuations in debt, the debt to assets ratio reveals conservative leverage management for most of the period. These observations suggest a period of investment or operational scaling around 2020, followed by stabilization and prudent financial management in subsequent quarters.

Total Debt (Including Operating Lease Liability)

The total debt levels exhibited a relatively stable pattern from early 2017 through mid-2018, generally fluctuating between approximately $1.3 billion and $1.4 billion. A significant drop in debt occurred in August 2018, reaching around $848 million, followed by an immediate rebound to levels exceeding $1.3 billion in the subsequent quarter. Starting from early 2019, there was a sharp increase in debt, peaking at over $5.3 billion in May 2020, likely reflecting substantial financing activity during that period. After this peak, debt levels oscillated between approximately $4.0 billion and $4.7 billion through early 2021, subsequently stabilizing near $4.0 billion towards the end of 2022. The overall trend suggests an increased reliance on debt financing beginning in 2019, with relatively high but stable debt levels maintained thereafter.

Total Assets

Total assets showed variability over the analyzed periods, starting at about $12.9 billion in early 2017 and reaching close to $15 billion by late 2017. A downward movement occurred in early to mid-2018, dipping near $12 billion. Subsequently, assets expanded steadily, reaching a notable peak exceeding $21 billion in late 2020, before experiencing a general decline through mid-2022, settling near $15-17 billion towards the end of the period. This trajectory indicates an initial growth phase followed by a contraction after a peak in late 2020, suggesting asset management adjustments or divestitures in the latter periods.

Debt to Assets Ratio (Including Operating Lease Liability)

The debt-to-assets ratio remained consistently low at around 0.1 from 2017 through mid-2018, with a brief drop to approximately 0.07 in mid-2018. Beginning in early 2019, the ratio rose markedly, reaching a peak of 0.34 in May 2020, coinciding with the highest debt and asset levels noted. After this peak, the ratio declined to a range between 0.20 and 0.26 for the remainder of the period, indicating a reduction in relative leverage but still elevated compared to earlier years. This pattern reflects the impact of increased debt and fluctuating asset values, suggesting a strategic shift towards higher leverage during the 2019-2020 timeframe, followed by efforts to moderate leverage ratios subsequently.

Total Assets

The total assets exhibit notable fluctuation over the periods analyzed. Beginning at approximately $12.955 billion, there is an initial increase reaching around $15 billion by late 2018, followed by a decline early in 2019. Subsequently, assets generally trend upward with some variability, peaking at about $21.2 billion in the last quarter of 2020. After this peak, total assets decline steadily through to mid-2022, falling back to roughly $15 billion.

Equity

Equity shows a general downward trend from the start, moving from approximately $4.5 billion down to near $3 billion by late 2022. There are intermittent periods of recovery and modest increases, notably rising through early 2021 up to around $4.6 billion. However, this improvement is short-lived, as equity declines once again sharply starting in early 2022 and remains near the lower levels at the end of the period.

Financial Leverage

Financial leverage, calculated as the ratio of total assets to equity, indicates an increasing reliance on debt or other liabilities relative to equity over time. Starting at roughly 2.9x leverage in early 2017, the ratio increases with some variation, reaching levels above 5x by late 2019. Following slight reductions through early 2021, leverage rises again significantly, peaking near 5.8x in early 2022 before maintaining a high level above 5x through the final periods examined. This suggests a heightened financial risk and greater use of leverage in recent years.

The analysis of the financial performance over the specified quarters reveals several key trends in earnings before interest and tax (EBIT), interest expense, and interest coverage ratio.

Earnings before interest and tax (EBIT)

The EBIT values exhibit marked fluctuations across the periods. Initially, EBIT shows moderate levels around the low 300-million range, with a notable spike in the quarter ending February 3, 2018 reaching 891 million. This peak is followed by a decline and a subsequent return to a higher level near 900 to 1000 million in early 2019. A significant decrease occurs in mid-2020 down to 235 million, likely influenced by broader economic conditions affecting earnings during that period. Subsequently, EBIT recovers strongly, reaching a peak of 1052 million by January 30, 2021. However, in the last quarters reported, EBIT trends downward again, with the value declining from 804 million at the start of 2022 to 371 million by October 29, 2022. Overall, EBIT demonstrates periods of strong growth interspersed with sharp declines, indicating volatility in operating profitability.

Interest expense

Interest expense remains relatively stable throughout the periods with minor fluctuations. The expense ranges mostly between 6 and 20 million, with no significant upward or downward trend. A decreasing trend in interest expense is observed starting in early 2020, dropping from a higher range around 18-20 million to a lower range of 6-7 million in the later periods. This suggests a reduction in debt servicing costs or refinanced debt obligations during these years.

Interest coverage ratio

The interest coverage ratio shows a consistent and strong upward trend over the periods. Starting at approximately 25 times coverage, the ratio steadily increases quarter over quarter, reaching exceptionally high values towards the later periods, peaking at 122.12 times in January 29, 2022. This trend indicates a growing ability to cover interest expenses from EBIT, reflecting improved financial strength and reduced risk related to debt repayment. Despite some decline in the last few quarters to 69.07 times by October 29, 2022, the ratio remains substantially higher than in earlier years.

In summary, the financial indicators reveal a pattern of volatile EBIT with sharp peaks and troughs, a stable to decreasing interest expense suggesting improved debt management, and a markedly increasing interest coverage ratio, highlighting enhanced capacity to meet interest obligations. These trends collectively suggest periods of operational challenges followed by recovery phases, with an overall strengthening of the company’s financial resilience over the analyzed timeframe.