Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
Quarterly Data
Dollar Tree Inc., common-size consolidated balance sheet: liabilities and stockholders’ equity (quarterly data)
Based on: 10-Q (reporting date: 2022-10-29), 10-Q (reporting date: 2022-07-30), 10-Q (reporting date: 2022-04-30), 10-K (reporting date: 2022-01-29), 10-Q (reporting date: 2021-10-30), 10-Q (reporting date: 2021-07-31), 10-Q (reporting date: 2021-05-01), 10-K (reporting date: 2021-01-30), 10-Q (reporting date: 2020-10-31), 10-Q (reporting date: 2020-08-01), 10-Q (reporting date: 2020-05-02), 10-K (reporting date: 2020-02-01), 10-Q (reporting date: 2019-11-02), 10-Q (reporting date: 2019-08-03), 10-Q (reporting date: 2019-05-04), 10-K (reporting date: 2019-02-02), 10-Q (reporting date: 2018-11-03), 10-Q (reporting date: 2018-08-04), 10-Q (reporting date: 2018-05-05), 10-K (reporting date: 2018-02-03), 10-Q (reporting date: 2017-10-28), 10-Q (reporting date: 2017-07-29), 10-Q (reporting date: 2017-04-29), 10-K (reporting date: 2017-01-28), 10-Q (reporting date: 2016-10-29), 10-Q (reporting date: 2016-07-30), 10-Q (reporting date: 2016-04-30).
The capital structure exhibits a significant shift in the composition of liabilities and equity over the analyzed period, characterized by a transition in debt reporting and a fluctuating reliance on external financing. Total liabilities initially trended downward from 70.93% in April 2016 to a low of 52.29% by November 2018, before returning to a higher range between 63% and 70% from 2019 through 2022.
- Debt and Lease Liability Transition
- A fundamental change in the balance sheet occurs in May 2019. Prior to this date, long-term debt was a primary liability component, decreasing from 44.89% in early 2016 to 31.59% by February 2019. Starting in May 2019, there is a sharp reduction in long-term debt to approximately 18%, coinciding with the introduction of operating lease liabilities. Long-term operating lease liabilities immediately became a major component at 25.06%, remaining relatively stable between 22% and 25% through October 2022. This shift suggests a reclassification of obligations, likely due to changes in accounting standards regarding lease capitalization.
- Current Liabilities and Operational Obligations
- Current liabilities as a percentage of the total capital structure increased from an average of 13% between 2016 and 2018 to a higher range of 18% to 22% from 2019 onward. Accounts payable maintained a consistent presence, generally fluctuating between 6% and 10%, with a notable peak of 10.49% in February 2019. The current portion of operating lease liabilities appeared in May 2019 and remained steady at approximately 6% for the remainder of the period, contributing to the overall increase in current liabilities.
- Shareholders' Equity Trends
- Equity levels showed a steady increase from 29.07% in April 2016 to a peak of 47.71% in November 2018. However, the recognition of lease liabilities in May 2019 caused a mathematical dilution of equity's proportion of the total balance sheet, dropping it to 29.74%. Following this adjustment, equity experienced a gradual recovery, climbing to 36.12% by October 2022, indicating an improvement in the solvency ratio and a reduction in relative leverage over the final three years.
- Deferred Taxes and Other Noncurrent Obligations
- Deferred income taxes, net, showed a persistent downward trend, starting at 9.75% in April 2016 and declining to 4.81% by October 2022. Other noncurrent liabilities remained minimal, generally staying below 3%. Unfavorable lease rights were present in the early part of the period, gradually declining from 0.89% until they were no longer reported after February 2019.
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