Analysis of Debt
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- Statement of Comprehensive Income
- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Income Statement
- Common-Size Balance Sheet: Assets
- Analysis of Solvency Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Enterprise Value to FCFF (EV/FCFF)
- Present Value of Free Cash Flow to Equity (FCFE)
- Net Profit Margin since 2005
- Debt to Equity since 2005
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Total Debt (Carrying Amount)
Ross Stores Inc., balance sheet: debt
US$ in thousands
| Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | Feb 2, 2019 | Feb 3, 2018 | Jan 28, 2017 | ||
|---|---|---|---|---|---|---|---|
| Current portion of long-term debt | |||||||
| Long-term debt, excluding current portion | |||||||
| Total senior Notes (carrying amount) |
Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).
- Current portion of long-term debt
- The current portion of long-term debt shows sporadic reporting across the periods, with values only recorded for the fiscal years ending February 3, 2018, and January 30, 2021. In 2018, the amount was $84,973 thousand, decreasing to $64,910 thousand by 2021. This indicates a reduction in the short-term debt obligations during the observed years but lacks consistency in reporting for a full trend analysis.
- Long-term debt, excluding current portion
- The long-term debt, excluding the current portion, exhibits a generally increasing trend over the periods. Beginning at $396,493 thousand in January 2017, the debt decreases in subsequent years to approximately $311,994 thousand in February 2018 and remains relatively stable through February 2020. A significant increase is observed in the fiscal year ending January 30, 2021, where the amount rises sharply to $2,448,175 thousand, maintaining a similar level in January 2022 at $2,452,325 thousand. This sharp increase suggests substantial new long-term borrowings or refinancing activities occurring around 2021, markedly altering the capital structure.
- Total senior notes (carrying amount)
- The total senior notes carrying amount broadly follows the pattern of long-term debt. Starting at $396,493 thousand in January 2017, it slightly increases to $396,967 thousand in February 2018 but then drops to $312,440 thousand and $312,891 thousand in 2019 and 2020, respectively. Similar to the long-term debt, a pronounced increase is evident by January 2021, rising to $2,513,085 thousand, before slightly declining to $2,452,325 thousand in January 2022. This trend indicates a substantial issuance or revaluation of senior notes during the 2021 financial year, reflecting a significant change in debt financing strategy.
Total Debt (Fair Value)
| Jan 29, 2022 | |
|---|---|
| Selected Financial Data (US$ in thousands) | |
| Total senior Notes (fair value) | |
| Financial Ratio | |
| Debt, fair value to carrying amount ratio | |
Based on: 10-K (reporting date: 2022-01-29).
Weighted-average Interest Rate on Debt
Weighted-average interest rate on debt:
| Interest rate | Debt amount1 | Interest rate × Debt amount | Weighted-average interest rate2 |
|---|---|---|---|
| Total | |||
Based on: 10-K (reporting date: 2022-01-29).
1 US$ in thousands
2 Weighted-average interest rate = 100 × ÷ =
Interest Costs Incurred
Ross Stores Inc., interest costs incurred
US$ in thousands
| 12 months ended: | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | Feb 2, 2019 | Feb 3, 2018 | Jan 28, 2017 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest expense | |||||||||||||
| Capitalized interest | |||||||||||||
| Interest costs incurred |
Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).
- Interest Expense
- The interest expense demonstrated a fluctuating trend over the given periods. Starting at $19,569 thousand in early 2017, it declined modestly to $16,407 thousand by early 2019, followed by a sharper decrease to $9,740 thousand in early 2020. However, there was a significant spike in 2021, reaching $88,064 thousand, before decreasing again to $75,161 thousand in 2022. This volatility suggests variable financing costs or changes in debt levels.
- Capitalized Interest
- Capitalized interest showed a consistent upward trajectory throughout the period. Beginning at $26 thousand in early 2017, the amount rose steadily each year, reaching $14,476 thousand by early 2022. This increasing pattern indicates a growing portion of interest costs being added to the asset base, potentially reflecting increased capital expenditures or longer project durations.
- Interest Costs Incurred
- Overall interest costs incurred mirrored the trends of the components. The figures slightly decreased from $19,595 thousand in early 2017 to $18,904 thousand in early 2019, then dropped substantially to $14,107 thousand in early 2020. A pronounced surge occurred in 2021, peaking at $100,315 thousand, followed by a decrease to $89,637 thousand in 2022. The large increase in 2021 aligns with the spike in interest expense and capitalized interest, indicating heightened borrowing or financing activities during that period.
Adjusted Interest Coverage Ratio
Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).
2022 Calculations
1 Interest coverage ratio (without capitalized interest) = EBIT ÷ Interest expense
= ÷ =
2 Adjusted interest coverage ratio (with capitalized interest) = EBIT ÷ Interest costs incurred
= ÷ =
- Interest Coverage Ratio (without capitalized interest)
- The interest coverage ratio exhibited a general increasing trend from 2017 to 2020, rising from 92.27 to 223.21. This indicates a strengthening ability to cover interest expenses with operating earnings during this period. However, there was a significant and abrupt decline in 2021, dropping sharply to 2.21, which implies a substantial reduction in the company's earnings relative to its interest obligations. In 2022, the ratio partially recovered to 31.05 but remained well below pre-2021 levels, suggesting ongoing challenges in maintaining strong interest coverage.
- Adjusted Interest Coverage Ratio (with capitalized interest)
- The adjusted ratio, which accounts for capitalized interest, also followed a similar trajectory. It increased steadily from 92.15 in 2017 to a peak of 154.11 in 2020, reflecting improving earnings capacity even when including capitalized interest expenses. In 2021, the ratio sharply decreased to 1.94, indicating a dramatic deterioration in the ability to cover interest obligations under more comprehensive measurement. By 2022, the adjusted ratio rebounded somewhat to 26.04 but still stayed significantly lower than earlier years, mirroring the trend noted in the unadjusted coverage ratio.